Bain Weighs Extending Investment in $12 Billion Drugmaker Stada

Bain Capital is weighing a deal to extend its investment in Stada Arzneimittel AG, one of Europe’s top listing candidates, as it seeks more time to expand the German drugmaker, people with knowledge of the matter said.

The buyout firm is discussing the possibility of selling its 50% stake in Stada to another Bain fund, the people said, asking not to be identified because the information is private. A deal could value the business at more than 10 billion euros ($12.1 billion), according to the people.

It invested in Stada through Bain Capital Europe Fund IV, which was raised in 2014, data compiled by Bloomberg show. Bain is considering transferring its holding to a more recent vehicle, the people said. Moving the stake to a newer fund would present an alternative to a sale or initial public offering, allowing Bain to own the business for longer while still returning cash to the original fund’s investors.

Such deals have become more common recently, as private equity norms that cap a fund’s lifespan have proven too rigid for Covid-stricken markets. Still, it would be a novel move for Bain. The buyout firm is still considering other exit options and hasn’t chosen which path to pursue, the people said.

Any decision will likely be made together with Cinven, the investment firm that owns the rest of the business, according to the people. Representatives for Bain, Cinven and Stada declined to comment.

Delayed Exit

Stada had been seen by bankers as one of the most sought-after potential IPOs in Europe this year. Bain and Cinven agreed to buy the business in 2017 for more than 5 billion euros and then expanded it rapidly through acquisitions. In the past two years, Stada has bought a package of consumer health and skin care brands from GlaxoSmithKline Plc, as well as a portfolio of products from Japan’s Takeda Pharmaceutical Co.

The company, headquartered in the spa town of Bad Vilbel on the outskirts of Frankfurt, increased revenue by 18% last year to more than 3 billion euros. It offers products such as Cetebe vitamin C supplements, Zoflora disinfectants, Nizoral dandruff shampoos and Ladival skin treatments.

Other buyout firms have also been seeking ways to hold onto their portfolio companies for longer. BC Partners is finalizing plans to sell Springer Nature to a special-purpose fund with new backers led by Neuberger Berman Group LLC, after scrapping a proposed IPO of the academic publisher, Bloomberg News reported last month. The deal will allow BC Partners to continue expanding Springer Nature before seeking a final exit in three to five years.

EQT AB in February participated in a fresh investment in veterinary care company IVC Evidensia through its ninth fund, with its seventh fund partially exiting. In August last year, European buyout firm Hg reinvested in Norwegian software developer Visma in a deal allowing some of its older funds to mostly sell out of their holdings.

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