Italy's Rovati family may have found its new partners, Bloomberg sources say. Two private equity firms would buy a 50% stake in the family's drugmaker Rottapharm, in a deal that values the company at about €1.7 billion ($2.2 billion).
Under the agreement, Avista Capital Partners and Clessidra Capital Partners would each own a 25% stake in the company, leaving the Rovatis majority control. The family had been hunting for minority investors since last year. At a $2.2 billion valuation, this deal falls short of the family's asking price; the Rovatis had valued their company at around $2.6 billion. Its 2011 revenues are estimated to be about €600 million ($770 million).
Among the potential investors that walked away were Mylan ($MYL), Forest Pharmaceuticals ($FRX), and Watson Pharmaceuticals ($WPI). Earlier this year, Reuters reported that price was the sticking point, provided the Rovatis insisted on keeping control of the company. "If you want a high price, you need to give away some control," a source close to the deal told the news service.
Avista and Clessidra have both been eyeing the deal for some time, according to the Italian media, along with a handful of other private equity groups. The Rovatis said from the get-go that they would be choosy about their new partners; they wanted the capital to support growth in international markets, but only with partners that could "fully satisfy" the family.
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