CVC seeks partners to back 10.9 billion-euro Italian drugmaker Recordati deal: sources

[MILAN] CVC Capital Partners is seeking co-investors to help bankroll its proposed 10.9 billion euros (S$16.2 billion) takeover of Italian drugmaker Recordati, according to people familiar with the matter.

The private equity firm has held initial discussions with investors including Groupe Bruxelles Lambert, Abu Dhabi Investment Authority (Adia), Singapore’s GIC and Caisse de Depot et Placement du Quebec about the possibility of teaming up, the people said.

The talks are taking place as CVC targets acquiring Recordati through a more recent fund, a plan that would require an equity infusion of 5.5 billion to 6 billion euros, the people said. That would make the deal one of the biggest ever leveraged buyouts in Europe. CVC’s seventh flagship fund is currently holding the stake in the Italian drugmaker, the people added.

Deliberations are ongoing and there’s no guarantee the discussions would lead to a deal, the people said, asking not to be identified as the information is private. Representatives for CVC, Adia, GBL and GIC declined to comment, while CDPQ did not immediately respond to requests for comment.

CVC last month offered to take over Recordati for 52 euro a share, after previously exploring a sale of its stake in the Italian company. The investment firm, the biggest shareholder of Recordati, plans to explore options including a potential sale of Recordati’s rare-diseases arm if it succeeds in its acquisition, Bloomberg News has previously reported.

Recordati was founded in 1926 by Giovanni Recordati in Correggio, Italy, and grew from a family pharmacy into a listed drugmaker with operations spanning specialty and primary care, consumer health and rare disease. Top selling drugs include the blood pressure medication Zanidip and Eligard, a hormone therapy for prostate cancer. The company also has a chemicals unit that supplies materials to other drugmakers. BLOOMBERG