As of October 21st , the American Private Equity firm, Clayton, Dubilier & Rice (CD&R), have agreed on acquiring a 50% stake Opella, a French consumer health company owned by Sanofi. Employing over 11,000 people worldwide and possessing iconic brands such as Allegra, Doliprane, and Dulcolax in their portfolio, Opella has grown to become the 3rd largest over the counter (OTC) vitamin and supplement business worldwide. CD&R will be paying €8bn for their stake, which sees the Opella valued at a 14x EV/EBITDA multiple. Morgan Stanley, Rothschild & Co and Citigroup will be acting as financial advisors on the transaction.
This divesture marks a turn in Sanofi’s strategic direction. Post closing of the deal, the French healthcare company will refocus its efforts on becoming a pureplay science driven biopharma firm aiming to deliver innovative medicines to patients. The separation of their consumer health and drug development businesses makes strategic sense considering the two divisions have unique R&D profiles, different distribution channels as well as a different skillset required to operate successfully. Similar deals following this trend include GSK and Pfizer spinning off Haleon and Johnson and Johnson waving off Kenvue. Spinning off business units to streamline operations within the healthcare space shows the growing need for specialization within the industry.
Prior to the agreement for the 50% stake in Opella, CD&R found themselves in a bidding war against French private equity firm, PAI. After just beating out PAI’s final offer, CD&R were then informed that the deal could potentially be blocked by the French Government due to concerns with sovereignty. Selling a French pharmaceuticals firm to a foreign buyer seemed to undermine Emmanuel Macron’s push to “reshore pharmaceutical production” and “[create] more industrial jobs” locally. After negotiating terms with the government, a clause was put into agreement which saw the French Government obtain a 2% shareholding, a board seat, and a promise on commitments to employ and investment domestically.
The CEOs of Sanofi and Opella both feel that CD&R’s impressive track record in the consumer sector will help unlock value in the OTC pharmaceuticals space. Eric Rouzier, Partner and Head of European Healthcare at CD&R, feels this partnership will add a “highly skilled and differentiated” brand to the fund’s portfolio. CD&R plan to leverage their deep market expertise and capital resources to drive growth for Opella. Sanofi’s stock traded at 10x EBITDA on the date of announcement.
This acquisition by CD&R underscores the increasing trend of specialisation in the healthcare industry, as Sanofi pivots to focus on biopharma innovation. By partnering with CD&R, Opella is well-positioned to capitalise on the firm’s consumer sector expertise, while Sanofi aligns its strategic goals with a streamlined, science-driven approach.
Written by: Ethan Lok
Sources: MergerLinks, Financial Times, Pharmiweb, and Reuters
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