PE Firms Circle Cardinal’s Methadone Unit

NEW YORK (Reuters) – The UK’s leading maker of methadone, used to treat opiate addiction, has attracted interest from a number of private equity groups, the Financial Times reported on Sunday.

Martindale Pharamceuticals was put up for sale by its parent Cardinal Health (CAH.N) in June, according to a transcript of a conference call the company held at the time.

Morgan Stanley (MS.N) is advising Cardinal, a pharmaceutical wholesaler, on the auction of Martindale, which has a price tag of about 150 million pounds, the Financial Times said.

Bidders include CBPE, the former private equity arm of Close Brothers and LDC, the buyout arm of Lloyds Banking Group, the paper said.

Other private equity groups also in the running are Silverfleet, the former buyout arm of Prudential; AAC Capital, the private equity group spun out of ABN Amro last year; and Exponent, set up by four former 3i dealmakers in 2004, it said.

Some potential bidders have shied away due to concerns over the reputational risk of making methadone and worries about the sustainability of its profit margins, the paper said. (Reporting by Megan Davies; Editing by Valerie Lee)