The pharmaceutical company Rovi already has offers on the table to buy its third-party manufacturing business, valued at around 3 billion. According to sources close to the process, several funds, including Advent and Permira, sent the company their preliminary offers for this subsidiary last week, which is mainly responsible for the pharmaceutical company’s good performance in recent years.
The company partially admitted the operation at the beginning of March in a statement to the National Securities Market Commission (CNMV),…
To continue reading this Cinco Días article you need a Premium subscription to EL PAÍS
The pharmaceutical company Rovi already has offers on the table to buy its third-party manufacturing business, valued at around 3 billion. According to sources close to the process, several funds, including Advent and Permira, sent the company their preliminary offers for this subsidiary last week, which is mainly responsible for the pharmaceutical company’s good performance in recent years.
The company partially admitted the operation at the beginning of March in a statement to the National Securities Market Commission (CNMV), where it acknowledged having hired the investment bank Lazard to advise it. In the communication to the supervisor, the pharmaceutical company avoided referring to the specific manufacturing business for third parties, but stated that it was “continuously evaluating potential strategic alternatives to enhance the value of its assets.” The company soared 4.7% on the stock market that day.
The main venture capital funds operating in Spain have shown their interest in recent months to the pharmaceutical company and its financial advisor. Last month, they officially launched the sales process and sent the notebook to potential interested parties. Among them, Advent and Permira submitted their bids at the end of last week, in the first round of offers. Others, such as TA Assocites, have taken a backseat. Pai and KKR are also involved in the process, according to the newspaper. Expansion. The participants have declined to comment on the operation.
The pharmaceutical company is seeking to sell a relevant part of the third-party manufacturing division to a financial partner, which has been one of its most profitable businesses in recent years. Its main asset is the 10-year agreement it has with Moderna to manufacture, among others, the covid vaccine. To put it in context: in 2019 the pharmaceutical company earned 65.5 million euros from its business for third parties. Last year, there were 409. Now, with the virus normalizing and with heparins—traditionally its best business—in the doldrums, the results are losing traction.
The pharmaceutical company recorded a net profit of 15 million in the first quarter of the year, 68% less than in the same period of the previous year. Its operating income also fell by 25%, to 151.2 million. This decrease was due, above all, to the lower dynamism of the third-party manufacturing division. In the report sent to the CNMV, the company indicated that the section generated lower income linked to the manufacturing of the covid vaccine. Of course, despite less dynamism, this division is division
The markets have been able to value their performance, despite being in a “transitional” year during the pandemic years. So far in 2024, Rovi’s stock has appreciated more than 42%. In the last calendar year alone it has more than doubled its value, and its market capitalization exceeds 4.7 billion euros. The analyst consensus compiled by Bloomberg gives the company controlled by the López-Belmonte family a target price of 88.83 euros per share one year from now. Or, what is the same, a potential of about 2%. While 41% of analysts recommend its purchase, nearly half opt to keep the value in their portfolio. Since the possibility of this operation was raised, the stock market has risen more than 15%.
The sale of this Rovi business adds to renewed interest in corporate operations in Spain. After a 2023 that was one of the worst years in mergers and acquisitions (M&A, in the jargon), a list of large transactions have already occurred in the first half of 2024. Liberty Media, the owner of Formula 1, agreed to purchase Dorna, the Spanish company that owns the Moto GP competition, from the Bridgepoint and CPPIB funds for more than 3 billion. Shortly after, the Swedish fund EQT agreed to take over the European University of Madrid from Permira for 2.2 billion. ICG, for its part, has acquired the food ingredients company Prosur for nearly 1 billion.
And several large-scale corporate movements are still pending. In addition to Rovi and its third-party sales business, still in an embryonic phase, the sale of Idealista is pending, which EQT negotiates exclusively with Cinven for more than 3,000 million, or the sale of the Globe Educate private school network for more than 1,000 million, with Cinven, Wendel and EQT as finalists.
Follow all the information Five days in Facebook, x and Linkedinor in our newsletter Five Day Agenda
Newsletters
Sign up to receive exclusive economic information and the financial news most relevant to you
Sign up!
