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CVC Capital takeover values pharma company Recordati at $6.8B

CVC Capital Partners has agreed to purchase a majority stake in Recordati, an Italian pharmaceutical company thats been family-owned since its formation in 1926.

CVC Capital Partners has agreed to purchase a majority stake in Recordati, a pharmaceutical company that’s been family-owned since its formation in 1926. The deal will value the Milan-based business at €5.86 billion (about $6.8 billion), with CVC paying €28 per share to acquire a 51.8% stake valued at just north of €3 billion from a holding company controlled by the Recordati family. The move will include a debt facility worth €750 million.

In mid-May, reports emerged that CVC had shelved talks to acquire Recordati for as much as €8 billion due to concerns over whether the company could justify such a hefty price tag in the midst of Italy’s uncertain political climate. It’s believed discussions between the firm and business date back to last year.

The agreement between CVC and Recordati is a rare one for a private equity firm in Europe’s pharmaceutical sector this year. Firms have completed just five transactions in the space so far, per the PitchBook Platform, well off the pace of 18 investments last year and a recent high of 27 from 2016.

So far, there hasn’t been a similar dip in the US. Firms have completed 11 private equity moves in the American pharmaceutical space during 2018, on track to equal last year’s total of 22.

CVC’s pact to purchase Recordati is significant for another reason, too: It’s the largest private equity deal in Europe’s pharmaceutical sector in at least 10 years, per PitchBook data.

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    Written by Kevin Dowd

    Kevin Dowd wrote The Weekend Pitch newsletter for PitchBook, covering startups, buyouts and the rest of the private market.

    A native of the Pacific Northwest, he’s an alumnus of the University of Washington with a degree in creative writing and journalism. He enjoys books and basketball and, most especially, books about basketball. He feels uncomfortable writing about himself in the third person.

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