Stada Arzneimittel, the German drugmaker, is in exclusive talks to buy the U.K. over-the-counter drug company Thornton & Ross. The company disclosed the talks today, saying it plans to wrap up the deal by the end of the quarter. The buyout would help beef up Stada's operations at a time when the generics industry is consolidating, putting the company on the defense against possible buyers.
With £66.34 million in sales for its most recent fiscal year, or about $102 million, Thornton & Ross ranks fifth in the British OTC market, Stada said in a statement. Its 11% sales growth for the year makes it one of the country's fastest-growing drugmakers. Plus, its margins are better than Stada's own, the company said. A potential purchase price wasn't disclosed.
The deal would strengthen Stada's presence in the British OTC drugs market, "which is especially strategically important," the company said in a statement. Plus, Stada could roll out its own non-prescription brands in the U.K. via Thornton & Ross's marketing and distribution network.
Stada has been a rumored takeover target for years, and it has cast about for its own acquisitions with little success. Last year, CEO Hartmut Retzlaff admitted the company either needed to make some deals or risk being bought by a larger drugmaker. Soon after, India's Sun Pharmaceuticals was rumored to be looking at a Stada buy. And by year's end, former Actavis ($ACT) CEO Claudio Albrecht--who sold his company to Watson Pharmaceuticals earlier this year--was said to be putting together investors to buy Stada himself.
Since then, Stada has allowed that it might entertain the right buyout offer. That deal obviously hasn't come to fruition, but Stada has reached a couple of its goals. It sold off two Russian plants last year, cutting its payroll load by 385 in the process.
- see the statement from Stada
Special Reports: Top Biopharma M&A Deals - 2012 | Top 11 Fastest-Growing Generics Companies