LONDON (Reuters) – U.S. skincare specialist Stiefel Laboratories Inc is considering selling itself and has asked Blackstone Group (BX.N) to seek offers for the business, a person familiar with the situation said on Friday.
The privately-held pharmaceutical maker is the world’s largest independent dermatology company and is viewed as a potentially attractive asset for major drugmakers, with a possible price tag of more than $3 billion.
Blackstone — which also owns a substantial stake in the group — and the company’s family owners are seeking a speedy sale.
“It’s definitely for sale. They (Blackstone) have just started contacting parties,” the source said.
The Wall Street Journal, which first reported news of the possible sale, said the business had drawn interest from a number of major drug companies, including Johnson & Johnson (JNJ.N), Novartis AG (NOVN.VX) and GlaxoSmithKline Plc (GSK.L).
Other potential bidders could include Sanofi-Aventis SA (SASY.PA), Allergan Inc (AGN.N) and Abbott Laboratories Inc (ABT.N), the source said.
The 160-year-old Stiefel — a maker of anti-itch creams, acne treatments and other skin treatments — is hoping to fetch somewhere in the range of $3 billion to $4 billion, the Wall Street Journal said.
With a variety of both prescription and over-the-counter products, Stiefel could appeal to a number of large drugmakers looking to diversify their businesses.
“Good dermatology assets like this are rare … they are talking about a high price of around 12 times EBITDA (earnings before interest, tax, depreciation and amortisation),” the person familiar with developments told Reuters.
J&J and Novartis have long been among the world’s most broad-based healthcare groups, while Glaxo’s Chief Executive Andrew Witty has made clear he wants to expand in areas other than traditional prescription drugs.
Witty laid out his vision for diversification again at a Cowen & Co healthcare conference this week.
Sanofi’s new CEO Chris Viehbacher is pursuing a similar diversification strategy and has said he is interested in small to mid-sized deals of up to $15 billion.
Valuations of many drugmakers have fallen over the past year in the global economic downturn, making smaller companies more attractive targets for bigger ones.
A spokeswoman for Stiefel told the Wall Street Journal the company’s board has not decided to sell the company and hasn’t received any offers. “Like any business, if we received an offer it would be carefully considered,” the spokeswoman said.
Stiefel and Blackstone could not immediately be reached by Reuters. Among potential bidders, Novartis, Sanofi and Glaxo declined to comment.
Stiefel is controlled by the founding Stiefel family. Private-equity group Blackstone, which invested $500 million in the company in 2007, owns a substantial minority stake.
Stiefel has annual revenue of about $1 billion, the Wall Street Journal said, citing a person familiar with the company.
Founded in Germany in 1847, the company is now based in Coral Gables, Florida.
The news of Stiefel’s potential sale comes against the backdrop of three heavyweight drug deals this year.
Roche Holding AG (ROG.VX) has agreed to buy the 44 percent of Genentech Inc (DNA.N) it doesn’t already own for $46.8 billion; Pfizer Inc (PFE.N) has agreed to pay $68 billion for Wyeth (WYE.N); and Merck & Co Inc (MRK.N) plans to buy Schering-Plough Corp (SGP.N) for $41.1 billion.
By Ben Hirschler
(Additional reporting by S. John Tilak and Sam Cage in Zurich; Editing by Jon Loades-Carter and Rupert Winchester)