CSL announces Vifor Pharma acqusition for $16.4bn, capital raise to fund the deal

Analysts were told to prepare for an after-market briefing on CSL’s expected acquisition of Vifor Pharma. Picture: Supplied

CSL has announced a deal to buy Vifor Pharma for $16.4bn.

The group is raising $6.3bn through a fully underwritten placement and $750m through a share purchase plan and it will also fund the transaction through $8.4bn of debt and existing cash.

CSL will pay $US179.25 per share for the Swiss group.

For the equity raising, shares will be sold in a book build process starting at $273 per share, an 8.2 per cent discount to the last closing price of $297.27 on December 13.

The placement will involve about 23.1m shares or 5.1 per cent of CSL’s ordinary shares on issue.

Working for Vifor Pharma is investment bank Credit Suisse.

Working for CSL as lead financial advisor is PJT Partners, while Bank of America and Goldman Sachs are advising and Gresham is offering independent advisory to CSL’s board.

Vifor’s board has backed the transaction, as has its 23.2 per cent shareholder, Patinex.

The deal represents a 40 per cent premium to the unaffected 60-day trading day volume weighted average price of Vifor Pharma shares as of December 1.

CSL describes Vifor as a high growth, cash generative and a sustainable business, which complements and expands the global leadership positions of CSL Behring and Seqirus.

The approach is by way of a public tender offer and is subject to acceptance from 80 per cent of all Vifor Pharma shares on a fully diluted basis and other approvals.

CSL said the deal would be immediately earnings per share accretive and could be executed while retaining its balance sheet strength.

The combined company will have an expanded pipeline of 37 products across development phases, representing an increase of 32 per cent from CSL’s current pipeline.

DataRoom tipped in March that CSL and Vifor may be in talks as the Australian healthcare giant ramped up acquisition plans.

However, the talks went cold due to various issues.

The column reported at the start of December that the pair were in exclusive talks.

The thinking among some is that CSL may have opted to move this week on an equity raising because of a recent rally in its share price.

Vifor counts former CSL director Abbas Hussain as its chief executive and sources say its major shareholder Martin Ebner has been open to an acquisition of the business by a party for months.

Private equity was known to have been circling in November last year.

The group specialises in treatments for iron deficiency and renal treatment and has been branching out into treatments for heart failure.

Mr Ebner, a Swiss billionaire, holds 20 per cent of the business through his company Patinex, which owns other multimillion dollar stakes in companies.

CSL is a biotechnology company that develops products to treat and prevent serious medical conditions.

The company uses human plasma to produce treatments for bleeding disorders including haemophilia and von Willebrand disease, primary immune deficiencies, hereditary angioendema, inherited respiratory disease and neurological disorders.