Brian McGee, Principal at Novasecta, provided his perspective on the recent bids by private equity firms Cinven and Advent on German generics firm Stada in an article in Scrip. Brian stated that “Cinven have a reputation for value creation through industry consolidation, where an initial investment acts as a platform to which other complementary businesses can be booted on”. An example of this that Brian mentions is their acquisition and combination of Labco and Synlab in the summer of 2015, creating the largest clinical laboratory services company in Europe.
Brian goes on to say that as a result of know-how gained from recent investments in the space, Advent “are well positioned to extract value from the Stada business. Equally partnerships or a merger with existing portfolio companies may make sense. So I imagine that the eventual deal for Stada will now come down to a combination of final price, the quality of the post-investment business plan, and an endorsement from management. It could ultimately go to either party.”
To read the full Scrip article, click here.