Private Equity Eyes Bayer’s Animal Health

Private equity investors both in Europe and the US are seen to be vying with each other to buy the animal health business that Bayer has put up for sale and is expected to fetch between €6 billion and €8 billion.

The German group is selling animal health to free up resources and capital to deal with the integration of Monsanto and potentially settle US lawsuits against Monsanto’s Roundup (glyphosate) herbicide.

Names on the list already are believed to include BC Partners, Cinven, both London-based along with CVC, and Frankfurt, Germany-based Permira. The official sale process has not yet begun but could start in the next few weeks.

Analysts believe this could be one of the five largest European private equity deals since 2008. Key products are veterinary treatments for both pets and livestock, including the best-selling treatment for fleas and ticks branded as Advantage.

Sales revenue of the business concentrated to around two-thirds in Europe came in at close to €1.5 billion last year, down slightly against 2017, with and earnings up slightly.

According to the newspaper Financial Times (FT), BC Partners is exploring a bid in combination with either a rival private equity firm, a large pension fund or a sovereign wealth fund.

Unlike some of its rivals, the newspaper noted that BC has experience in animal health, having acquired VetPartners – which itself has been acquisitive of late – in August 2018.

CVC reportedly has hired advisers as it prepares a bid, while Cinven and Permira are mulling whether to team up to make an offer. Advent International is also expected to bid.