CVC to buy Recordati for €3bn

September 2018 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

September 2018 Issue

In an acquisition worth approximately €3bn, a consortium of investment funds controlled by private equity firm CVC Capital partners is to buy a controlling stake in Italian pharmaceutical group, Recordati S.p.A.

“This transaction is important in the further development of the company my grandfather founded over 90 years ago,” said Alberto Recordati, chairman of Recordati. “We have found in CVC a partner who shares our vision, values and passion for the company, its employees and its role in developing and distributing healthcare around the world.”

The consortium – which is led by CVC Fund VII and includes global private markets firm StepStone and institutional investor PSP Investments – has structured the transaction as a fully financed acquisition of the Recordati family’s holding company FIMEI S.p.A, which owns 51.8 percent of Recordati S.p.A. The members of the Recordati family will receive part of the dividend in the form of a deferred and subordinated long-term debt security in the amount of €750m. The closing of the FIMEI purchase is anticipated to take place in the last quarter of 2018 and is subject only to mandatory competition approvals.

The consortium’s expectation is that Recordati will remain a publicly listed company.

Following closing, and in accordance with Italian Companies and Exchange Commission (CONSOB) rules, the consortium will make a mandatory tender offer (MTO) to the remaining minority shareholders. The Recordati family has requested a full cash offer at €28.00 per share.

“I believe that this is a great outcome for the company and its employees who will benefit greatly from having CVC as a partner,” said Andrea Recordati, chief executive of Recordati. “In the process of finding the best partner to take Recordati forward, 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.” In his capacity as chief executive, Mr Recordati will invest alongside the consortium.

“Recordati has always been a very carefully managed, international pharmaceutical company with a broad platform of products and a strong geographical footprint in primary care,” said Cathrin Petty, head of EMEA healthcare at CVC. “Over the last decade, Recordati has built up a very attractive rare disease business which we look forward to expanding in addition to the core business. We hope that through our expertise and global healthcare network we will help accelerate this growth across orphan and specialty care to build a global leader in the industry.”

Acting as financial adviser to CVC are Leopoldo Zambeletti and Rothschild. Gattai, Minoli, Agostinelli & Partners together with White & Case LLP are acting as legal advisers. Facchini, Rossi is acting as tax adviser. Committed financing for the transaction is being provided by Deutsche Bank, Credit Suisse, Jefferies and Unicredit.

Mr Andrea Recordati concluded: “I am very pleased to be working alongside CVC in accelerating Recordati’s global expansion. I am personally reinvesting alongside the consortium as I believe in and support Recordati.” Giampiero Mazza, head of CVC Italy, added: “We are honoured to be chosen by the Recordati family who have put great trust in us to continue in their role as the majority shareholder of their company. We have a great admiration for the business which we have known for over many years.”

Fraser Tennant