CSL in talks to buy European business Vifor Pharma

CSL is believed to be in talks to buy Vifor Pharma. The company’s CEO Paul Perreault is pictured outside its Parkville head office. Picture: Stuart McEvoy.

CSL is believed to be in exclusive talks to buy Switzerland-based business Vifor Pharma in a deal that could be worth $10bn.

The understanding is that an equity raising is looming for the Australia’s largest healthcare company through Bank of America that could be in the order of $3bn to $4bn.

DataRoom flagged in March that an acquistion of Vifor by CSL could be on the cards.

However, the understanding is that now negotiations have progressed, as revealed by DataRoom online on Thursday.

Sources say that earlier, issues related to intellectual property placed a pause on a looming transaction.

But such matters have now been resolved.

The publicly listed and Zurich-based Vifor describes itself as a global leader in iron deficiency therapies.

It focuses on nephrology, cardiology and rare diseases and offers a diversified portfolio of prescription and non-prescription medicines.

Europe has been the traditional acquisition hunting ground for CSL, but some have believed recently its focus has been specifically on Switzerland where it has a large manufacturing facility that remain virtually empty.

CSL has a mammoth $140.9bn market value.

The biotechnology group researches, develops, manufactures and markets products to treat and prevent serious human medical conditions.

 

Its products include blood plasma derivatives, vaccines, antivenom and cell culture reagents used in various medical and genetic research and manufacturing applications.

CSL has been a major beneficiary of the global pandemic, and at the start of this year, this column reported speculation as to whether it would make use of the billions of dollars added to its market capitalisation by making an acquisition.

Analysts say that with so much spare cash at its disposal, a $10bn deal for the biotech is easily affordable.

The rule of thumb on major mergers and acquisitions is that the acquirer usually outlays equity amounting to about half of the deal value.

It has been some time since CSL embarked on any major corporate activity, but a major deal in Europe could bring a hint of nostalgia for chairman Brian McNamee.

Dr McNamee previously ran CSL from 1990 to 2013 and on his watch the company purchased ZLB from the Swiss Red Cross for nearly $1bn, which transformed what was already a large, successful business into a healthcare powerhouse.

CSL’s share price has retreated in recent days, with a slump common before a major equity raising.

Shares closed down $3.89 to $305.30.

The company’s share price has staged a steady climb over the past decade and has not broken its stride — it has moved from $150 at the start of 2018 and broke the $200 barrier that year.

CSL is partnering with AstraZeneca in producing a COVID-19 vaccine, producing more than 50 million doses at its factory at Melbourne’s Broadmeadows.

It uses human plasma to produce treatments that are used around the world for bleeding disorders including haemophilia and von Willebrand disease, primary immune deficiencies, hereditary angioendema, inherited respiratory disease and neurological disorders.

Meanwhile, Vifor was reportedly fielding a private equity approach in November last year, said to value the business at around $14bn.

The approach was rebuffed due to differing views on price.

For the year to June, CSL reported a $2.4bn net profit, up 10 per cent on a constant currency basis from the previous corresponding period, while revenue also gained 10 per cent.

Chief executive Paul Perreault said for the 2022 financial year, CSL’s net profit was anticipated to be in the range of $2.2bn to $2.25bn at a constant currency.