FRANKFURT (Reuters) – A strategic player looks set to clinch Ratiopharm after a raft of private equity bidders dropped out of the race to bid for the German generic drugs maker, sources familiar with the matter said Wednesday.
Private equity firms KKR, TPG Capital and Permira have already dropped out of the auction, people familiar with the matter said. Goldman Sachs (GS.N) which had submitted a preliminary non binding offer together with Advent, has also dropped out of the race, these people said.
“It will end up being a strategic investor,” a banker familiar with the deal said. Only Swedish firm EQT remains among the financial investors in the race, the banker said.
Many private equity bidders were unwilling to pay the 2.3 billion euros ($3.39 billion) price tag asked by VEM, the firm controlled by Ludwig Merckle.
Private equity firms are finding it difficult to get funding for deals in the current environment.
Strategic investors who had previously expressed interest included France’s Sanofi-Aventis (SASY.PA), Iceland’s Actavis, Israel’s Teva (TEVA.TA), U.S. companies Mylan (MYL.O), Watson Pharmaceuticals (WPI.N) and Pfizer (PFE.N), as well as a Chinese drug maker, people familiar with the matter said.
For the current year Ratiopharm expects revenues of 1.6 billion euros and earnings before interest taxes debt and amortization of more than 200 million euros.