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Private equity group CVC Capital Partners is on the hunt for a buyer for its majority stake in Italian pharmaceutical outsourcer Genetic Group, in a deal that they hope will value the business at about €700mn, according to people familiar with the matter.
Luxembourg-based CVC, which has €193bn under management, has hired advisers from Rothschild to help it sell its 60 per cent stake in the Salerno-based contract manufacturer, the people said.
The company produces technology for asthma inhalers, nasal sprays and medical devices used to treat respiratory disease and eye problems.
Genetic’s founder Rocco Pavese and his family, who retained a minority stake in the business after CVC’s acquisition in 2020, would like to remain a shareholder following any possible transaction.
Advisers are pushing to complete a sale in the first half of next year, although it may not go ahead, the people said.
CVC has doubled earnings before interest, taxes, depreciation and amortisation at Genetic to about €50mn since taking over the business.
Private equity has invested heavily in the pharmaceutical supply chain in recent years as an avenue to benefit from the boom in drug development, without taking the risk of investing in experimental medicines.
CVC, Rothschild and Genetic declined to comment.
The contract manufacturing industry has grown significantly as big drugmakers have shed in-house manufacturing operations to save costs, with the sector projected to be worth more than $220bn by 2030, according to data from consultancy Alvaraz and Marsal.
Genetic, which was established in 2000, owns the intellectual property of about 50 products that it sells in more than 30 countries. It manufactures the products on behalf of pharmaceutical clients. The group is likely to draw interest from other private equity firms.
Private equity groups have bought several smaller specialised contract manufacturers this year, including FairJourney Biologics, Avid Bioservices and Single Use Support.
CVC owns the business through its strategic opportunities fund, which usually holds on to businesses for the long-term.
The private equity firm floated in Amsterdam in April. Its shares have risen close to 60 per cent to €22.25 compared with the offer price at the initial public offering, giving the group a market value of more than €23bn.
