Stada's patience pays off as Cinven, Bain clinch big $5.6B buyout bid

Stada said on Monday that it plans to support a $5.6 billion buyout offer.

Months into discussions to sell itself, Stada’s patience seems to have paid off for shareholders. The German drugmaker has announced plans to sell itself for €5.32 billion ($5.63 billion) shortly after weighing a $3.7 billion private equity takeout.

In a Monday announcement, Stada said it’s planning to support a purchase by London-based private equity firm Cinven and Boston investment firm Bain Capital. The groups ponied up €65.28 plus a dividend of €0.72 per Stada share, a 48.9% premium to the company’s value before the deal talks started.

Cinven and Bain came through with “the most financially appealing offer,” according to the drugmaker.

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Stada’s executive and supervisory boards still have to sign off on the transaction, but the company said it’s expecting to press ahead with the new proposal from Bain and Cinven.

The announcement comes shortly after another Boston private equity firm, Advent International, offered $3.7 billion to purchase Stada. When Stada received that offer back in February, the drugmaker said it’d continue to seek offers.

Then, in March, Stada boosted its sales forecast and rolled out cost-cutting measures in an effort to draw higher bids. That seems to have worked, as Bain and Cinven offered more than some industry watchers previously expected Stada to fetch.

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By thoroughly seeking buyers and negotiating for the last several weeks, Stada has “thus created approximately €750 million in additional value for our shareholders,” CEO Matthias Wiedenfels said in Monday’s announcement. 

The companies signed an investor agreement that includes protections for Stada employees, manufacturing sites and its corporate strategy. The drugmaker’s headquarters and other key sites will remain in their current locations, according to the release, and the buyers agreed to “broadly refrain from business-related layoffs” beyond those already planned.

Further, Cinven and Bain “agreed to provide both financial and strategic support” for potential acquisitions that could help Stada grow.

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Mylan, Fosun Pharmaceuticals, Gland Pharma and Merck were rumored to be interested in a Stada buy throughout the deal discussions.