A lengthy takeover process has ended with German drugmaker Stada agreeing to be bought by investment groups Bain Capital and Cinven.
They upped their bid to beat a rival private equity consortium – Advent and Permir.
Each share will be bought for 65 euros and 28 cents along with a dividend of 0.72 euro per share. That is 49 percent more than the price four months ago, before the first report of a takeover approach and values the company at about 5.3 billion euros, including debt.
“I don’t think that anyone just recently would have expected us to get this far in such a thorough manner and so quickly,” said Stada Chief Executive Matthias Wiedenfels in a statement.
Founded in 1895 in Dresden as a pharmacists’ cooperative, Stada is one of the last independent generic drug makers in Europe and also makes over-the-counter medicines.
Much of its revenue comes from Russia and eastern Europe.
But the business has come under price pressure as medical insurers in Germany, its largest market, are pushing to buy in bulk at low prices.
The company is seeking to expand its non-prescription consumer care business and has also made forays into diagnostics kits and electronic cigarettes.
Cinven and Bain said they would like to buy more healthcare businesses to combine with Stada.
They reportedly are seeking cost cuts that will make the high investment in Stada worthwhile.
However those cost reductions are not likely to come from layoffs as Stada said it has signed an investor agreement which would include protection provisions for employees. The company employed more than 10,000 people as of the end of 2015.
Bain and Cinven have agreed to avoid forced redundancies for four years in a move that exceeds staffing pledges incorporated in current business plans, Stada said.