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Tuesday, 30 October 2012

Bayer to buy U.S. vitamin maker Schiff for $1.2 billion



The logo of Germany's largest drugmaker Bayer HealthCare Pharmaceuticals is pictured on the front of its building in Berlin April 28, 2011. REUTERS/Fabrizio Bensch
Image : REUTERS/Fabrizio Bensch

Germany's Bayer is to buy U.S. vitamins maker Schiff Nutrition International for an agreed $1.2 billion as it seeks stable sources of growth to complement its more volatile prescription drugs business.

Many pharmaceutical companies are keen to expand in non-prescription drugs as a steadier, albeit less profitable, counterweight to prescription medicines, where there are risks of, for example, clinical trial failures and patent expiries.

Bayer, Germany's biggest drugmaker, said on Tuesday it was offering $34 per share in cash to Schiff shareholders, a 47 percent premium over Friday's closing price of $23.19.
The deal values Schiff at about 3.1 times its forecast annual sales, around the upper end of typical deal multiples of 2-3 in the non-prescription drugs industry.

"The deal appears consistent with Bayer's strategy, and although the premium paid appears rich at first, our reaction is it isn't outlandish," Bernstein Research analyst Jeremy Redenius said.

In August, Aspen Pharmacare bought some GlaxoSmithKline non-prescription drugs for about two times annual sales.

At 1130 GMT shares in Bayer, which invented Aspirin and synthetic rubber, were up 0.1 percent at 66.56 euros, broadly in line with the STOXX Europe 600 healthcare index.

30/10/2012  :  By Ludwig Burger / Yahoo News.

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