Nycomed eyes Solvay SA’s drug operations

By Jyotsna Ramani on 09/24/2009 – 1:41 pm PST -- Biotech

In an attempt to takeover the European junk bonds after the financial crisis, Nycomed, one of the private equity-owned Swiss drugmaker has made a 4.5 billion Euros bid to purchase Solvay SA’s drug operations. The Zurich based company said that it this bid and takeover is finalized it will help them to reach their annual sales figures of $6 million which is why they have gone ahead and made such a high bid to buy Solvay’s pharmaceutical unit and operations. However, the Belgian conglomerate Solvay SA’s has not yet responded to the bid and has informed that they might take a little time to think about it and would not rush through the deal.
Currently, Nycomed is owned by Nordic Capital, Credit Suisse’s DLJ Merchant Banking, Coller Capital and Avista Capital Partners and has annual sales figures of 3.19 billion Euros. However, in the year 2008, Nycomed reported a loss of 77.9 million Euros, but with this strategic deal they can turn the tables and make a decent annual profit as Solvay’s drug unit has features for treating Parkinson’s disease, hypertension, cholesterol related health problems and even hormone replacement therapies for both women and men.
Also, there are reports that Nycomed might face a competition for Solvay’s bid as there is an unnamed Japanese pharma firm that is keeping a watchful eye on the bid situation and could make a better proposal to Solvay SA’s at the right time. Many business analysts have claimed that Nycomed might go for an IPO in few years and this bid is just a part of the plan which Nycomed might execute a little later in the next couple of years.
On the other side, Solvay has decided not to comment on any news regarding the bid and other market rumors. However, Solvay did mentioned that they are studying the market conditions and have also hired Morgan Stanley, Rothschild and Citigroup to analyze the situation which would be ideal for the sale. Solvay’s Chief Executive Officer Christian Jourquin have said that Solvay needs to have more clarity on the future of drug unit in the last quarter which is why they are taking their time to analyze the situation and has not taken any substantial decision to accept or reject the bid. Solvay’s Tricor drug partner, Abbott Labs and Takeda Pharmaceuticals have clearly opt out of this deal as they are not interested in it.
Nycomed is seriously looking forward for the successful tie-up with Solvay SA’s and has arranged bridge loans and is willing to arrange a long-term finance through their US partners. Nycomed is also likely to finance the deal through high yield bond market as they speculate that this pharmaceutical unit will be crucial and will earn stable income which will help Nycomed to cover their dropping sales figures. Many pharmaceutical companies like Nycomed have already learned that researching, developing and production of new drugs can be expensive and make things further complicated for the growth of the company.

In an attempt to takeover the European junk bonds after the financial crisis, Nycomed, one of the private equity-owned Swiss drugmaker has made a 4.5 billion Euros bid to purchase Solvay SA’s drug operations. The Zurich based company said that it this bid and takeover is finalized it will help them to reach their annual sales figures of $6 million which is why they have gone ahead and made such a high bid to buy Solvay’s pharmaceutical unit and operations. However, the Belgian conglomerate Solvay SA’s has not yet responded to the bid and has informed that they might take a little time to think about it and would not rush through the deal.

Currently, Nycomed is owned by Nordic Capital, Credit Suisse’s DLJ Merchant Banking, Coller Capital and Avista Capital Partners and has annual sales figures of 3.19 billion Euros. However, in the year 2008, Nycomed reported a loss of 77.9 million Euros, but with this strategic deal they can turn the tables and make a decent annual profit as Solvay’s drug unit has features for treating Parkinson’s disease, hypertension, cholesterol related health problems and even hormone replacement therapies for both women and men.

Also, there are reports that Nycomed might face a competition for Solvay’s bid as there is an unnamed Japanese pharma firm that is keeping a watchful eye on the bid situation and could make a better proposal to Solvay SA’s at the right time. Many business analysts have claimed that Nycomed might go for an IPO in few years and this bid is just a part of the plan which Nycomed might execute a little later in the next couple of years.

On the other side, Solvay has decided not to comment on any news regarding the bid and other market rumors. However, Solvay did mentioned that they are studying the market conditions and have also hired Morgan Stanley, Rothschild and Citigroup to analyze the situation which would be ideal for the sale. Solvay’s Chief Executive Officer Christian Jourquin have said that Solvay needs to have more clarity on the future of drug unit in the last quarter which is why they are taking their time to analyze the situation and has not taken any substantial decision to accept or reject the bid. Solvay’s Tricor drug partner, Abbott Labs and Takeda Pharmaceuticals have clearly opt out of this deal as they are not interested in it.

Nycomed is seriously looking forward for the successful tie-up with Solvay SA’s and has arranged bridge loans and is willing to arrange a long-term finance through their US partners. Nycomed is also likely to finance the deal through high yield bond market as they speculate that this pharmaceutical unit will be crucial and will earn stable income which will help Nycomed to cover their dropping sales figures. Many pharmaceutical companies like Nycomed have already learned that researching, developing and production of new drugs can be expensive and make things further complicated for the growth of the company.

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