Advent in talks with Sanofi to acquire Zentiva in €1.9bn deal

June 2018 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

June 2018 Issue

In a €1.9bn deal that would create a new and independent generics leader, private equity (PE) investor Advent International is in talks with global biopharmaceutical company Sanofi to acquire Zentiva, the firm’s European generics business.

The divestiture of Zentiva, a non-core business, is part of Sanofi’s strategy to simplify and reshape its operations. Advent’s offer for Zentiva is firm, binding and fully financed. The PE firm has stated that it will utilise its extensive experience of executing corporate carve-outs to work collaboratively with Sanofi to form a new independent operation.

Furthermore, Advent has said that it will support the Zentiva management team to invest in the company’s operations, production facilities and R&D pipeline. “We have long been attracted to the generics pharmaceutical sector as it enables more people to access high quality treatments by lowering their cost,” said Tom Allen, managing director and co-head of Advent International’s European Healthcare team.

Founded in 1984, Advent is one of the largest and most experienced global private equity investors, with over 25 years experience investing in the healthcare sector. The firm has invested in over 330 PE transactions in 40 countries and has approximately €35bn in assets under management. With offices on four continents, Advent has established a globally-integrated team of over 190 investment professionals across North America, Europe, Latin America and Asia.

Advent’s target, Zentiva, is headquartered in Prague and provides access across Europe to a broad generics portfolio covering a multitude of therapeutic areas. Zentiva’s integrated value chain and pan-European commercial footprint makes it one of the largest generics players in Europe, reaching over 40 million patients in 25 European countries. Well-known as an agile healthcare player, Zentiva has the expertise and agility to tailor customer-centric solutions in the three European generics market archetypes: pharmacy, physician and tender/wholesaler.

Sanofi, Zentiva’s parent company, is a French life sciences company which transforms scientific innovation into healthcare solutions. The firm has more than 100,000 employees in 100 countries, invested €5.5bn in R&D in 2017 and has had seven new molecular entities and vaccines approved since 2015.

“Zentiva is a robust business with a highly talented workforce and we believe it has demonstrated its potential for growth,” said Olivier Brandicourt, chief executive of Sanofi. “Following a comprehensive review of strategic options for our generics unit in Europe, we have determined that transferring this business to Advent is the best option to ensure its long-term success.”

Sanofi’s divestiture of Zentiva is the latest in a number of transactions the company has conducted in recent months. The others include the €3.9bn acquisition of biotech company Ablynx in January 2018, as well as the $11.6bn deal, also in January, which saw the US haemophilia specialist Bioverativ acquired. Recent months have also seen assets sold off, including the sale of a number of brands to Charterhouse Capital Partners’ Cooper-Vemedia drugs manufacturing arm for €158m.

The Advent/Sanofi transaction is expected to close by the end of 2018, subject to finalisation of definitive agreements, completion of the appropriate social processes and approval of relevant regulatory authorities.

Cédric Chateau, managing director and head of Advent International in France, concluded: “We believe that Zentiva is a great platform, full of talented people, who we can invest behind to build a new, independent, European generics leader.”

Fraser Tennant