CVC in exclusivity for Genetic – report

A deal is expected to be signed by the beginning of August, the report added, citing three sources familiar with the situation.

CVC's offer came in the region of €280-300m, the report added, with the transaction covering the sale of 60-70% of Genetic's capital.

First-round bids in the UBS-run process came in at €250-300m, while the vendor was seeking a valuation of around 15x its €23-25m 2019 EBITDA (therefore potentially up to €375m).

An earlier Mergermarket report indicated that CVC was competing against KKR and ProA Capital in the final stage of the auction. Although KKR was reportedly seen as frontrunner in the auction, CVC was able to put a more compelling offer on the table due to the commercial synergies between Genetic and its portfolio company DFE Pharma, a German excipients manufacturer for the pharmaceutical industry, two of the sources told Mergermarket.

CVC acquired a 50% stake in DFE Pharma from New Zealand-listed dairy company Fonterra for NZD 633m (€363m) last year. The GP deployed capital from its CVC Strategic Opportunities II fund, which held a final close in July 2019 on €4.6bn, surpassing its target of €4bn.

The pandemic has not had a material impact on Genetic, as the medical sector remains highly active, according to Mergermarket. Genetic produces asthma medicines and since the beginning of the Covid-19 crisis has increased sales.

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