CVC Will Buy Control of Recordati for 3 Billion Euros
(Bloomberg) -- Private equity firm CVC Capital Partners agreed to buy control of drugmaker Recordati SpA for about 3 billion euros ($3.5 billion) from the Italian family that founded the company almost a century ago.
The Recordati family, which holds about 51 percent of the company through its investment vehicle Fimei SpA, had been considering a sale since the August 2016 death of long-time chief executive Giovanni Recordati. Previous attempts to sell the business, including a round of informal talks in 2016 amid interest from Asian buyers, failed to result in a transaction.
CVC will pay 2.3 billion euros in cash, and 750 million euros in subordinated long-term debt securities to buy the family’s stake, according to a statement from Recordati on Friday.
Giovanni Recordati founded the business out of a family apothecary dating back to the 19th century. He created Laboratorio Farmacologico Reggiano, the predecessor to Recordati SpA, in the northern city of Correggio, in 1926. Giovanni died in 1952 and left the company to his son, Arrigo, who moved it to Milan a year later and began expanding research and development, product lines and access to markets outside of Italy.
Arrigo died in 1999, bequeathing the business to his four children and putting management in the hands of his son Giovanni, who died last year, leaving his share to his wife.
“It was important to find a party that would allow Recordati to remain independent, with continuity for management and employees, and accelerate its growth strategy as a leading global consolidator in the pharmaceutical industry,” Chief Executive Officer Andrea Recordati said in the statement. “I have chosen to reinvest personally alongside the investors.”
Three of Recordati’s products date back to the family apothecary, including an anti-spasm intestinal drug created in 1927, a laxative from 1930, and Tefamin, a heart tonic, diuretic and blood-pressure-reducing agent devised in 1935.
“Success lies in being proactive and consistent with your business, and maintaining flexibility,” Giovanni Recordati said in an April 2012 interview with PMLiVE. “It is as straightforward as that.”
The Recordatis weren’t the only billionaires to emerge from the Italian pharmaceuticals industry, one of the nation’s best performing sectors in recent years.
Luigi Rovati, founder of Rottapharm Madaus, and Alberto and Paolo Chiesi, the septuagenarian brothers behind Parma-based Chiesi Farmaceutici SpA, were identified as billionaires in November 2014 after Rovati sold the company run by his two sons to Sweden’s Meda AB for 2.3 billion euros. Mauro Ajani was identified as a billionaire four months earlier after his Cosmo Pharmaceuticals rose almost 300 percent in two years.
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