It's official: AstraZeneca has sold its dental and medical device unit to Dentsply International for $1.8 billion, just as yesterday's rumors predicted. The unit didn't fetch as much as AstraZeneca might have hoped--initial interest was expected at more than $2 billion--but AZ can take heart in the fact that Astra Tech was a popular prize.
As the Financial Times reports, Dentsply "knocked out" private equity firm EQT and medical company Biomet with a "much higher" offer. AstraZeneca CEO David Brennan (photo) sounded pleased about the flurry of bidding. "The high degree of interest and the competitive nature of this process is evidence of the value that the employees of Astra Tech have built in the marketplace," Brennan said in a statement.
The auction losers, however, might get another chance later, at least for a piece of the Astra Tech pie. Dentsply was reportedly focused on Astra Tech's dental business, given its specialization in that area. So, deal-watchers now figure that the devices arm--which makes urological and surgery devices--could go on the block sooner rather than later.
So, what will the deal do for AstraZeneca? Deliver some cash, for one thing. It's an all-cash deal, expected to close by year's end. And AZ has a $4 billion share-buyback program going. For another, the sale focuses AZ ever more tightly on pharma; at least one analyst was skeptical about that development.