Thomas H. Lee Partners LP is among private-equity firms that submitted bids for GlaxoSmithKline Plc (GSK)’s consumer-health assets, while Sanofi SA remains interested in some brands, people with knowledge of the process said.
Blackstone Group LP (BX) and Prestige Brands Holdings Inc. (PBH) submitted a joint offer, while Bain Capital LLC and Thomas H. Lee also made bids in the final round that ended late last week, said the people, who declined to be identified because the process is private. Thomas H. Lee may only be interested in some of the assets offered, one person said. Sanofi, France’s largest drugmaker, isn’t interested in all the brands, two people with knowledge of the process said.
“It’s important for Glaxo to sell these assets,” Navid Malik, a London-based analyst with Merchant Securities Ltd., said in a telephone interview. “Selling them at 3 or 4 times their sales would be a good result. They would probably invest this in share buybacks and potentially more bolt-on deals.”
Some bids may value the assets at 1 billion pounds ($1.6 billion), a person with knowledge of the matter said. They had been valued at up to 2 billion pounds, a person with knowledge of the process said in March. The brands that Glaxo is looking to sell had revenue of about 500 million pounds last year, or 10 percent of the company’s total consumer-product sales.
Glaxo Chief Executive Officer Andrew Witty said last month the sale was “going nicely” and he expected to complete the process by the end of the year. The company said in April that it was looking to dispose of products including the Alli diet pill, Lactacyd soap, and the Nytol sleep aid as its consumer- health unit focuses on faster-growing brands.
Sanofi Shuns Alli
Sanofi isn’t interested in buying the Alli diet pill, Chief Executive Officer Chris Viehbacher said in a May 6 interview. Should Glaxo not find a buyer for the whole business, Sanofi would be open to a potential transaction not involving Alli, one person said.
Alli contains orlistat, a chemical that blocks the intestines from absorbing fat when taken as many as three times a day with meals. Orlistat has been linked to reports of liver injury, prompting consumer advocacy groups to demand its removal from the market. The U.S. Food and Drug Administration announced new warnings on the pill’s label last year.
Officials for Thomas H. Lee couldn’t immediately comment while Bain Capital representatives weren’t immediately available. Claire Taaffe, a Glaxo spokeswoman in London, declined to comment, as did spokesmen for Sanofi and Prestige.
Goldman Sachs Group Inc. (GS) is managing the sale.
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