Nicotine patch maker LTS Lohmann attracts bidders - sources

Hisamitsu Pharmaceutical Co

11/10/2013 16:32

FRANKFURT, Oct 11 (Reuters) - German medical skin patch maker LTS Lohmann has attracted offers valuing the company at 1.1-1.3 billion euros ($1.5-1.8 billion), three people familiar with the sale said.    Japan's Hisamitsu Pharmaceutical  4530.T  has bid along with Blackstone  BX.N , which is looking to combine LTS with its drug contract manufacturing subsidiary Catalent, and KKR  KKR.N , which is seeking to complement its hard capsules maker Capsugel. Separately, private equity groups EQT, CVC  CVC.UL , Nordic Capital, Carlyle and Wendel have placed offers.  German specialty chemicals maker Evonik  EVKn.DE  and Nivea skin cream maker Beiersdorf  BEIG.DE  showed initial interest but did not take part in the auction, the sources said. The bids value the group at about 12 times earnings before interest, taxes, depreciation and amortisation (EBITDA) of about 95 million euros. Listed healthcare companies in Europe trade at a multiple of about 10, StarMine data shows. LTS Lohmann's owners, which include Novartis  NOVN.VX  with a 43 percent stake, met on Friday to discuss the offers, one of the sources said.  German billionaire Dietmar Hopp, who co-founded software giant SAP  SAPG.DE , holds about 30 percent while German investment company BWK owns a 24 percent stake. Sources told Reuters in July that Morgan Stanley had been hired to find a buyer for LTS Lohmann.  ID:nL5N0F83DF  Bankers were putting together about 700 million euros of debt financing to back the sale of the medical patch maker, banking sources said earlier this month.  ID:nL6N0HU1HQ  LTS Lohmann makes 286 million euros in annual sales from nicotine and other medical patches to treat conditions including Parkinson's and Restless Legs Syndrome.  A likely sticking point in negotiations will be whether LTS Lohmann can succeed in preventing generic drugmakers from launching cheap copies of its Exelon patch for mild to moderate dementia. Novartis has sued Actavis  ACT.N  for trying to bring its version to market. Transdermal patches of the type made by LTS have become increasingly important in the drugs industry since they offer a convenient and reliable way of delivering a variety of medicines. A spokesman for Dietmar Hopp's investment vehicle and the private equity groups declined to comment.  Hisamitsu, Novartis and BWK were not immediately available for comment. ($1 = 0.7395 euros) (Reporting by Arno Schuetze; additional reporting by Ludwig Burger and Emi Emoto; Editing by David Cowell) ((ludwig.burger@thomsonreuters.com)(+49 69 7565 1311)(Reuters)(Messaging: ludwig.burger.thomsonreuters.com@reuters.net)) Keywords: NOVARTIS LTS/SALE