Bain and Cinven takeover of Stada gets over the line

Oscar Geen
18 August 2017

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Bain Capital Private Equity and Cinven Partners have acquired more than 63% of outstanding shares of German pharmaceutical company Stada during the acceptance period, which ended on 16 August, thereby meeting the conditions of their takeover offer for the firm.

The offer values the business at €66.25 per share, consisting of a cash consideration of €65.53 per share plus a dividend of 72 cents per share. This values the equity at €4.1bn and gives the business a total enterprise value of €5.6bn.

The consortium was still 17% short of the acceptance threshold with less than a day to the deadline. It had a previous bid rejected in June after missing the acceptance threshold by 2.3%.

Cinven will use capital from the Sixth Cinven Fund, which held a final close on its hard-cap of €7bn in June 2016.

Bain, Cinven and Stada have signed an investment agreement with the full support of the company's management and board.

Debt
To back the acquisition, Stada issued €735m in senior secured 2024 notes at 3.5% and €340m in senior notes at 5%, arranged by Citibank and JP Morgan, according to unquote" sister publication Debtwire. It also issued a €1.95bn term loan B comprising a €400m revolving credit facility and a €1.65bn first lien arranged by Barclays, Nomura and UBS, according to another report by the same publication. The total debt package of €2.8bn equates to a debt ratio of 50% and leverage of more than 5.2x based on reported enterprise value and Stada's latest financial results.

Company
Established in 1890 and headquartered in Bad Vilbel, near Frankfurt am Main, Stada produces off-patent active pharmaceutical ingredients for generic medicines, representing 58% of the company's sales, and branded products, which account for 40% of revenue.

With 10,000 employees, Stada released its annual results at the start of August, reporting €202.3m in adjusted EBITDA from €1.14bn in sales for H1 2017 – up 17% and 10% on H1 2016, respectively.

People
Bain Capital Private Equity – Dwight Poler, Michael Siefke (managing directors).
Cinven Partners – Supraj Rajagopalan, Bruno Schick (partners).
Stada Arzneimittel – Engelbert Coster Tjeenk Willink (chair, CEO).