Report: GSK closing in on deal with Boston PE group for OTC assets

A Boston private equity group has pulled ahead in a contest to scoop up consumer health products from GlaxoSmithKline ($GSK), with a final deal in the works that could be revealed by the companies this week, sources told Bloomberg. The London-based drug giant put the assets on the block as it streamlines its consumer brands and seeks global growth in certain product categories.

Boston-based Thomas H. Lee Partners LP and GSK haven't decided on a price for the OTC assets up for sale, unnamed sources told the news service. The products on the block--including diet pill Alli, Lactacyd soap, FiberChoice products and Nytol sleep aid--brought in $774 million in 2010 revenue or a tenth of GSK's total consumer business, according to the report. Though the purchase price is unknown, GSK has enjoyed a competitive bidding process with the likes of Bain Capital and the partnership consisting of Blackstone and Prestige Brands making bids.

GSK, like its pharma counterparts, has been looking beyond the marquee U.S. and European markets to areas of rapid business growth in Asia and other emerging areas. In its consumer health unit, the drug giant plans to keep products in the oral health and nutrition categories that it believes have global market appeal, and the sale of other products in the OTC business would enable GSK to deliver a nice dividend or share buyback deal to stockholders, Bloomberg reports.

"Glaxo is focusing on consumer assets it can globalize," said Gbola Amusa, a UBS analyst in London, as quoted by Bloomberg. "These assets being sold are worth more to other companies with more of a regional focus."

- get more in the Bloomberg article