Advent, Blackstone Among Suitors Circling $20 Billion Sanofi Arm
Some of the world’s largest buyout firms, including Advent International and Blackstone Group Inc., are circling the consumer health division of French pharmaceutical giant Sanofi ahead of a potential separation of the business, according to people familiar with the matter.
(Bloomberg) -- Some of the world’s largest buyout firms, including Advent International and Blackstone Group Inc., are circling the consumer health division of French pharmaceutical giant Sanofi ahead of a potential separation of the business, according to people familiar with the matter.
The business is also drawing early interest from Bain Capital, CVC Capital Partners, EQT AB and KKR & Co., the people said, asking not to be identified as the matter is private. The unit could be valued at about $20 billion in any deal, they said.
Sanofi said in October that it plans to separate the division, which sells over-the-counter products including Phytoxil cough syrups and Icy Hot pain relief gels. Advisers to the Paris-based drugmaker have communicated that it’s open to a sale of the consumer health business if it can achieve its desired valuation, the people said.
Such a deal would be one of the largest buyout transactions this year, though could prove tricky to execute given the challenges of financing large deals. Sanofi may retain a stake in the business as part of any agreement, the people said.
Deliberations are in the early stages and there is no guarantee that the private equity firms will make formal proposals. Representatives for Advent, Bain, Blackstone, CVC, EQT and KKR declined to comment.
A spokesperson for Sanofi said the company is reviewing potential separation scenarios, but believes the most likely path would be through a capital markets transaction to create a France-headquartered listed company, in the fourth quarter of this year at the earliest.
Sanofi has said that separating from the consumer unit will allow it to generate better long-term value from cutting-edge therapies, particularly in immunology or in vaccines.
With the separation, Sanofi would join the ranks of big pharma peers like GSK Plc and Johnson & Johnson, which have split off their consumer divisions in recent years to free up resources for developing next-generation therapies for cancer, rare diseases and other ailments.
--With assistance from Pamela Barbaglia and Tim Loh.
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