Citigroup VC Arm Looks to Sell Stake in Drugmaker

Citigroup Venture Capital International, Partners in Life Sciences and Greek private equity firm Global Finance are looking to sell Turkish drugmaker Biofarma, Reuters reported. Citigroup Venture Capital and Partners in Life Sciences bought the copycat drugmaker for $200 million three years ago, and later sold a stake to Global Finance. Reuters reported that the firms have begun an auction for Biofarma, and that JPMorgan is managing the sale.

(Reuters) – Citigroup’s (C.N) venture capital arm and two co-investors have begun an auction of Turkish copycat drugmaker Biofarma, three people familiar with the matter said, in what could be Turkey’s biggest healthcare deal.

The owners of Biofarma Pharmaceutical Industry hired JPMorgan to manage the sale, the people said on Monday.

The bank has recently sent out short sale documents to drum up interest in the business, they said. It will now distribute longer information packs and seek indicative bids.

Citigroup Venture Capital International (CVCI) and fellow investor Partners in Life Sciences (PiLS) bought Biofarma for about $200 million in 2007 and later sold a stake to Greek private equity firm Global Finance.

Biofarma, CVCI and Global Finance did not immediately respond to requests for comment. JPMorgan declined to comment. Reuters could not locate a PiLS representative.

In October Reuters first reported the trio were considering selling the business in a $500 million-plus deal. Turkey’s biggest healthcare deal to date is a $603 million takeover by Zentiva NV in 2007.

Biofarma offers a rare chance to gain full control of a sizeable emerging markets player without family ownership or another controlling investor.

It could attract both larger generics manufacturers and major drugmakers looking to build a base in Turkey, whose pharmaceutical market is growing more than 7 percent a year.

Abbott Laboratories (ABT.N), GlaxoSmithKline Plc (GSK.L), Pfizer Inc (PFE.N), Teva Pharmaceutical Industries Ltd (TEVA.O) (TEVA.TA) and Sandoz, the generics unit of Novartis AG (NOVN.VX), are among likely bidders, one of the people said.

CVCI is also preparing to sell Amoun, one of Egypt’s biggest drugmakers, people familiar with the matter told Reuters on Oct. 20. It owns Amoun with two other co-investors. (Reporting by Quentin Webb; Additional reporting by Alexandra Hudson in Istanbul; Editing by David Holmes)