A Medical Device Daily
CSL (Parkville, Australia), the world's second-largest maker of blood plasma products, agreed to buy Talecris Biotherapeutics (Research Triangle Park, North Carolina) for $3.1 billion cash, boosting sales by more than a third with its biggest acquisition.
In buying Talecris, CSL also will assume the company's $1.3 billion in debt.
CSL will raise $1.5 billion in a share sale to help fund the acquisition, it said in a statement. CSL will buy Talecris from Cerberus Partners and Ampersand Ventures.
Talecris's Gamunex and Prolastin, used to treat immune disorders such as lupus and multiple sclerosis in which the body attacks itself, are in the fastest-growing segments of the $15 billion global plasma-product market.
CSL shares were halted from trading for the stock sale. They last traded at A$39, valuing the company at A$21.5 billion ($18.6 billion). The new shares are being offered at between A$34.50 and A$39 each, as much as 11.5% below Wednesday's closing price, according to an offer document sent to investors on Thursday. At the top of the range, CSL will sell 43.58 million shares, equivalent to about 8% of issued capital.
The stock has gained 7% this year, the best-performing healthcare share on Australia's benchmark S&P/ASX 200 Index.
CSL CEO Brian McNamee said that net income rose 30% to A$701.8 million in the 12 months to June 30 from A$539.3 billion a year earlier, due to sales and royalties from the cervical cancer vaccine Gardasil and increased revenue from plasma products.
Sales rose 15% to A$3.8 billion in fiscal 2008. In the same period, Talecris generated revenue of A$1.4 billion, CSL said. The combined company will still trail Baxter International (Deerfield, Illinois) in plasma-derivative sales by about 25%.
"The opportunity for our employees, customers, distributors, suppliers — and most importantly our patients — to benefit from being part of the CSL family is exciting," said Lawrence Stern, Talecris CEO/chairman, in a prepared statement. "At the same time, the transaction represents a good return for our shareholders, many of whom are our employees."
Talecris makes drugs and other products from blood plasma to treat diseases such as immune deficiency disorders and hemophilia. It also owns a chain of 56 blood-collection centers and two manufacturing facilities in the U.S. Last year, it reported revenue of $1.2 billion.
CSL paid 12 times earnings before interest, tax, depreciation and amortization for Talecris. Baxter trades at 14.6 times earnings, while CSL trades at 21.2 times.
McNamee said he expects combined sales of about A$3.8 billion for the plasma products unit after the Talecris purchase. Baxter generated revenue of $4.65 billion from plasma last year. The purchase still requires regulatory approval. If the deal isn't approved within a year, CSL or Talecris can call if off. CSL agreed to pay $75 million if regulators block the deal, McNamee said.
Cerberus and Ampersand formed Talecris in 2005 when they bought Bayer's (Leverkusen, Germany) plasma business for about $590 million (Medical Device Daily, April 4, 2005).
Those owners had filed plans in July 2007 to take Talecris public through an initial public offering of stock. But that IPO debut stalled as stock-market turmoil dampened investors' appetite for IPOs.
The purchase will "provide CSL with the additional scale, breadth of products, geographical presence, low cost base and capacity to increase output to enhance our position in the $15 billion global plasma products market," McNamee said.
CSL said it will fund the rest of the acquisition with cash and a loan from Merrill Lynch & Co., who is advising on the deal.
In other dealmaking news, Parexel International (Waltham, Massachusetts), a global biopharmaceutical services organization, reported the successful closing of its previously disclosed $182 million acquisition of ClinPhone (Nottingham, UK), a clinical technology organization (MDD, June 16, 2008).
By combining ClinPhone with Perceptive Informatics, Parexel's wholly owned technology subsidiary, Perceptive is now one of the industry's largest eClinical technology providers. The combined company offers access to eClinical technologies and resources, providing clients and service providers with the benefits of an extensive line of products and services throughout the entire clinical development lifecycle.
"Combining the sophisticated, in-depth capabilities of Perceptive and ClinPhone represents a major step forward for Parexel in meeting increased industry demand for a truly comprehensive eClinical platform," said Josef von Rickenbach, CEO/chairman of Parexel.
"Both companies bring tremendous capabilities to this deal. As a combined clinical technology company, Perceptive Informatics enables customers to benefit from the efficiency of best-in-class software and services from one source," said Steve Kent, former CEO of ClinPhone and newly appointed president of Perceptive Informatics
Parexel provides a broad range of knowledge-based contract research, medical communications and consulting services to the worldwide pharmaceutical, biotechnology and medical device industries.