The CEO of the pharmaceutical company Stada, Peter Goldschmidt, has commented for the first time on a possible billion-euro sale of the company. “From my point of view, our owners are in an orientation phase in which the first exploratory talks are taking place,” said Goldschmidt of the German Press Agency on the occasion of the half-year figures. “Financial investors have no pressure to sell. I don’t expect a decision before 2024.”
The media had previously reported that the financial investors Bain Capital and Cinven, who took over Stada in 2017 for 5.3 billion, could exit in whole or in part. There was also speculation about an IPO. In a deal, Stada could be valued at ten billion euros or more. Stada, known for drugs like Grippostad and Ladival, employs 13,800 people worldwide, 1,530 of them in Germany. “Whether and when Stada is sold is solely the decision of our owners Bain Capital and Cinven,” emphasized Goldschmidt. They had declined to comment on the rumours.
The fact that an exit six years after the takeover would be common for financial investors and that Stada’s growth provides good arguments speaks in favor of a sale. In the first half of the year, sales rose by 16 percent to almost 2.1 billion euros and adjusted operating profit (Ebitda) by 30 percent to 509 million euros, as Stada announced on Tuesday in Bad Vilbel. “We are well on the way to achieving more than four billion euros in sales and one billion euros in EBITDA this year,” said Goldschmidt.
Russia business as an obstacle?
In the first half of the year, the business with over-the-counter medicines grew faster than that with copycat medicines. Stada reintroduced some over-the-counter products and acquired brands from pharmaceutical giant Sanofi. The cold wave in winter also helped. In view of drug bottlenecks in Germany, Stada has invested high double-digit millions in order to expand its inventories and remain able to deliver, said Goldschmidt. “We have benefited from problems with competitors.” The bottom line is that Stada’s profit rose to 182 million euros after 169 million a year earlier.
Stada has grown strongly under Bain Capital and Cinven: since the takeover in 2017, sales have increased by around two thirds from 2.3 to 3.8 billion euros in 2022, while operating profit (Ebitda) has roughly doubled. A series of takeovers helped, for which Stada accepted high total debt of 5.6 billion euros. The number of employees has also grown significantly since the takeover.
There are a few hurdles to selling Stada. The environment on the financial markets is difficult for large IPOs or takeovers. Another obstacle is Stada’s large business in Russia, which contributes around 15 percent to sales. A purchase of Stada including the Russian business should hardly be justifiable, at least for interested parties from Europe or the USA. Therefore, there was speculation about a spin-off of the Russian activities. Despite the war in Ukraine, Stada did not withdraw from Russia and refers to the medical care of the local people.
