Poland's largest pharma scouts for joint bidder in potential $4B buyout of former Sanofi generics unit: Reuters

The generics sector may see even more consolidation. Zentiva, once Sanofi’s European generics unit, is said to have attracted buyout interest.

Polpharma, Poland’s largest drugmaker, is looking for partners in a potential joint bid to acquire Zentiva, Reuters reports, citing three sources.

A deal could value the Czech company at up to 3.5 billion euros ($4 billion), the sources said. That would be significantly pricier than the 1.9 billion euros private equity shop Advent International paid Sanofi for the business in 2018.

After assuming ownership, Advent has beefed up the Zentiva franchise through a series of acquisitions. They include the 2019 acquisitions of Romanian drugmakers Solacium Pharma and Alvogen’s Labormed, plus the purchase of Amneal subsidiary Creo Pharmaceuticals.

Private investors typically purchase an entity to puff it up and make a good return upon exit. Polpharma reportedly saw an opening for Zentiva after Advent rejected proposals for an initial public offering of the company last year.

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To convince Advent to bite, Polpharma needs to come up with an attractive offer because the current owner is in no rush to sell, two of the sources told Reuters.

“The bid price is key to luring Advent to the negotiating table,” one of them said, as quoted by the news wire. “Advent is not running any auction process. It is up to interested parties to force their hand.”

Zentiva currently makes generics and over-the-counter products for more than 40 countries from its own sites in India, Romania and Czech Republic, according to its website.

As for Polpharma, the company boasts a broad portfolio of about 780 products, including prescriptions drugs, OTC meds, hospital drugs, dietary supplements and medical devices, covering a wide range of disease areas, its website shows. Poland, Kazakhstan and Russia are the firm’s main markets.

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Private equity companies have bought up many generics and consumer health players in recent years. For one, Bain Capital and Cinven bought Germany’s Stada in a $5.6 billion deal back in 2017. European private equity Duke Street acquired DCC Healthcare’s generics unit Kent Pharmaceuticals in 2019.

A report in November noted that Swedish investment group EQT and the Struengmann family of Germany were considering a joint move to purchase Novartis’ generics business Sandoz, which is undergoing a strategic review.