Aug. 13 (Bloomberg) -- CSL Ltd., the world's second-largest maker of blood plasma products, agreed to buy Talecris Biotherapeutics Holding Corp. for $3.1 billion in the biggest acquisition by an Australian health-care company.

CSL will raise $1.5 billion in a share sale to help fund the purchase, the Melbourne-based company said in a statement. CSL will buy Talecris, based in Research Triangle Park, North Carolina, from Cerberus Partners LP and Ampersand Ventures.

Talecris's Gamunex and Prolastin treat lupus and multiple sclerosis, immune disorders in which the body attacks itself. They are in the fastest-growing segments of the $15 billion global plasma-product market. CSL will boost sales by more than a third with the purchase, which is almost four times larger than its 2004 acquisition of Aventis Behring.

Plasma ``is a life-saving product that's funded primarily by governments, so the stability of the cash-flow is enormous,'' said Helen Cameron, a health-care analyst at Citigroup Inc. in Sydney. ``CSL has been very good at optimizing the return on every liter of plasma, and really that's the game.''

CSL will fund the rest of the acquisition with cash and a loan from Merrill Lynch & Co., which is advising on the deal, the Australian company said in the statement.

CSL shares were halted from trading for the stock sale. They last traded at A$39, valuing the company at A$21.5 billion ($18.6 billion). The new shares are being offered at between A$34.50 and A$39 each, as much as 11.5 percent below yesterday's closing price, according to an offer document sent to investors today. At the top of the range, CSL will sell 43.58 million shares, equivalent to about 8 percent of issued capital.

Cerberus, Ampersand Profit

The stock has gained 7.3 percent this year, the best- performing health-care company on Australia's benchmark S&P/ASX 200 Index.

Cerberus, the New York-based hedge fund formed by former Drexel Burnham Lambert Inc. trader Stephen Feinberg, and Wellesley, Massachusetts-based Ampersand formed Talecris in 2005 when they bought Bayer AG's plasma business for about $590 million. Lawrence D. Stern, 51, is chairman and chief executive officer of Talecris.

Plasma is the watery liquid in which blood cells are suspended. Doctors are increasingly using plasma-based products such as Gamunex, which accounted for more than half of Talecris's $1.2 billion in sales last year, and CSL's Privigen to treat diseases in which immune cells attack the nervous system, such as MS and Guillain-Barre syndrome. The treatment is also being studied for Alzheimer's disease.

Gardasil Sales

CSL Chief Executive Officer Brian McNamee, 51, said today net income rose 30 percent to A$701.8 million in the 12 months to June 30, from A$539.3 billion a year earlier, due to sales and royalties from the cervical cancer vaccine Gardasil and increased revenue from plasma products.

``This is an important step forward for CSL,'' McNamee said of the acquisition in a telephone call with reporters. He described CLS and Telacris as the second and third-largest plasma suppliers behind Baxter International Inc. of Deerfield, Illinois, and said the purchase ``positions us for growth. It affects our ability to expand output, and that's really what we're trying to position with this transaction.''

The company expects combined sales of about A$3.8 billion for the plasma products unit after the Talecris purchase, McNamee said. Baxter generated revenue of $4.65 billion from plasma last year.

Revenue Rose

CSL Sales rose 15 percent to A$3.8 billion in fiscal 2008. In the same period, Talecris generated revenue of A$1.4 billion, CSL said. The combined company will still trail Baxter's plasma- derivative sales by about 25 percent.

CSL paid 12 times earnings before interest, tax, depreciation and amortization for Talecris. Baxter trades at 14.6 times earnings, while CSL trades at 21.2 times.

``This looks like an acquisition that CSL's balance sheet can comfortably handle,'' said Rob Gallagher, a Sydney-based analyst for Macquarie Group Ltd. ``On first look, the synergy potential is quite high.''

Prolastin, which earned Talecris about $280 million last year, is designed to treat an inherited and deadly disorder in which a normally beneficial enzyme damages the lungs, causing emphysema.

CSL, which generates about A$900 from every liter of plasma it processes, should improve manufacturing efficiency at Talecris, which makes about A$580 per liter, Citigroup's Cameron said.

CSL agreed to pay $75 million if regulators block the deal, McNamee said.

Blood-Collection Centers

Talecris operates 56 blood-collection centers and two manufacturing facilities in the U.S.

The purchase will ``provide CSL with the additional scale, breadth of products, geographical presence, low-cost base and capacity to increase output to enhance our position in the $15 billion global plasma products market,'' McNamee said.

Buying Talecris tops Symbion Health Ltd.'s A$2.4 billion acquisition of Primary Health Ltd. in May as Australia's biggest health-care purchase since Bloomberg began compiling data in 2000.

CSL will fund the rest of the acquisition with cash and a loan from Merrill Lynch & Co., who is advising on the deal, it said in the statement.

To contact the reporter on this story: Simeon Bennett in Singapore at sbennett9@bloomberg.net

Last Updated: August 13, 2008 08:13 EDT