Blackstone to acquire Takeda Pharma’s consumer unit for £2.3bn

BY Fraser Tennant

In a deal valued at $2.3bn, Japanese multinational Takeda Pharmaceutical Company Limited has sold its consumer healthcare business – Takeda Consumer Healthcare Company Limited (TCHC) – to US investment firm Blackstone.

Under the terms of the definitive agreement, Blackstone and its affiliates will acquire a variety of over-the-counter medicines and health products from TCHC – products which generated total revenues of more than $566m in 2019.

Following the divestment of TCHC, Takeda Pharmaceutical Company Limited has said it will focus on developing drugs for unmet medical needs and rare diseases.

“Throughout the decades, TCHC’s brands including Alinamin have earned the trust and confidence of consumers in Japan,” said Milano Furuta, chairman of the board at TCHC. “We believe the active and strategic investment by Blackstone will enable TCHC to maximise its potential. Blackstone is one of the world’s leading investment firms and has rich experience in the healthcare sector, and we are confident this will help TCHC further develop its products and brands and strengthen the business overall.”

TCHC’s flagship vitamin drug Alinamin has been a staple product in Japanese households for Almost 70 years. In addition to Alinamin vitamin tablets and drinks, TCHC offers a platform of other over-the-counter products, including Benza Block, a leading symptom based cold remedy.

“We are privileged to announce this partnership and invest in the company’s plans to become the leading consumer healthcare business in Japan,” said Atsuhiko Sakamoto, head of private equity at Blackstone Japan. “TCHC is well-positioned to grow its established brands in Japan and launch new and expanded product offerings.”

One of the world’s leading investment firms, Blackstone’s assets under management (AUM) total $564bn. The deal to buy TCHC is Blackstone’s second private equity transaction in Japan’s healthcare sector following the acquisition of AYUMI Pharmaceutical in 2019.

Acting as exclusive financial adviser to Blackstone is Mitsubishi UFJ Morgan Stanley Securities, while Simpson Thacher & Bartlett LLP and Anderson Mori & Tomotsune are acting as legal advisers.

Mr Sakamoto concluded: “We see tremendous potential for TCHC in Japan and throughout Asia, and we are confident that Blackstone’s global network and expertise in the sector can accelerate TCHC’s growth.”

News: Takeda to sell Japan consumer health unit valued at $2.3 billion to Blackstone

Second time around: Chaparral Energy files for Chapter 11

BY Fraser Tennant

In what is its second filing in four years, independent oil and natural gas exploration and production company Chaparral Energy, Inc. has filed for Chapter 11 bankruptcy protection.

Chaparral’s filing is the latest in a string of bankruptcies in the energy sector this year, a list which includes Gavilan Resources, Whiting Petroleum, Echo Energy Partners, Ultra Petroleum, Skylar Exploration, Diamond Offshore, Freedom Oil and Gas, and Templar Energy. Virtually all cited the devastating impact of the coronavirus (COVID-19) pandemic.

Through the Chapter 11 process – part of a restructuring support agreement (RSA) with certain of its funded debtholders to pursue a prepackaged plan of reorganisation – Chaparral expects to significantly restructure its balance sheet and strategically position itself for long-term growth.

Chaparral previously filed for bankruptcy protection during the oil price slump in 2014-16, emerging from Chapter 11 in March 2017.

“While we have taken carefully measured and decisive action to address the challenges of 2020, the overall impact to the energy industry, including Chaparral, has been severe,” said Chuck Duginski, chief executive of Chaparral. “Therefore, after thorough analysis of our strategic options, we determined that a voluntary Chapter 11 filing with broad creditor support provides the best course for Chaparral and its stakeholders.”

Chaparral intends to restructure its balance sheet by equitising all $300m of its existing unsecured bond obligations and substantially bolster its liquidity position through $175m in lending obligations under a reserves-based exit facility and a fully backstopped $35m new money convertible note rights offering.

“A swift restructuring will right-size our balance sheet, improve our cost structure and best position Chaparral for the future,” added Mr Duginski. “Importantly, we intend to maintain normal operations and meet all of our trade commitments timely and under their existing terms.”

Founded in 1988 and headquartered in Oklahoma City, Chaparral Energy is an independent oil and natural gas exploration and production company focused in the oil window of the Anadarko Basin in the heart of Oklahoma.

Mr Duginski concluded: “This restructuring will allow us to continue to efficiently operate without interruption and focus on delivering strong results. I would like to thank our employees, contractors, suppliers and customers for their unwavering commitment to Chaparral.”

News: Shale driller Chaparral Energy files for bankruptcy due to pandemic woes

Sanofi to acquire Principia for $3.7bn

BY Richard Summerfield

French healthcare company Sanofi SA has agreed to acquire Principia Biopharma Inc for around $3.7bn, the companies have confirmed.

The deal, which will strengthen Sanofi’s presence in research and development (R&D) areas, will see the company buy all the outstanding shares of Principia for $100 per share in cash, representing an aggregate equity value of approximately $3.68bn on a fully diluted basis, and a premium of 10 percent to Principia Biopharma’s closing price of $90.74 on 14 August.

“This acquisition advances our ongoing R&D transformation to accelerate development of the most promising medicines that will address significant patient needs,” said Paul Hudson, chief executive of Sanofi. “The addition of multiple BTK inhibitors to our pipeline demonstrates our commitment to strategic product acquisitions in our priority therapeutic areas. Full ownership of our brain-penetrant BTK inhibitor ‘168 removes complexities for this priority development program and simplifies future commercialisation.”

“The Phase 2b data in relapsing multiple sclerosis showed the strong potential of ‘168 to address disability and disease progression, and triggered the start of Phase 3 studies across the full spectrum of MS,” said John Reed, global head of R&D at Sanofi. “Through this acquisition, we will be able to expand and accelerate development of BTK inhibitors across multiple indications. Both ‘168 and rilzabrutinib have ‘pipeline in a product’ potential, and we look forward to unlocking their full treatment benefits across an array of diseases.”

“Principia’s successful design and development of a whole portfolio of BTK inhibitors for immunology is aimed to transform the treatment for patients with immune-mediated diseases,” said Martin Babler, president and chief executive of Principia Biopharma. “By combining with Sanofi, we will bring significant resources to expand and accelerate the potential benefits of these therapies. The benefit of developing several BTK inhibitors will allow us to target specific organ systems for optimal patient benefit. The merger will provide global resources to get these novel therapies to patients faster.”

Sanofi expects to complete the acquisition in the fourth quarter of 2020.

News: Sanofi in hunt for specialty drugs with $3.7 billion deal for U.S.-based Principia

Liberty Global secures Sunrise deal

BY Richard Summerfield

Liberty Global has agreed to acquire Sunrise Communications in an all-cash, $7.4bn deal.

Under the terms of the deal, Liberty Global will pay 110 francs per share for Sunrise, a 32 percent premium to the company’s average share price over the past 60 days. The transaction is expected to close around year end, subject to regulatory approval.

Last year, a $6.3bn deal which would have seen Liberty sell its Swiss cable unit UPC to Sunrise collapsed following opposition from shareholders including Freenet, a German company that owns 24 percent of Sunrise. On Wednesday, Freenet pledged its support to the new bid, which “appreciates the value that Sunrise has created over the past five years”.

“The industrial logic of this merger is undeniable, but the real winners are Swiss consumers and businesses,” said Mike Fries, chief executive of Liberty Global. “This powerful combination of 5G wireless and gigabit broadband will accelerate digital investment at a time when connectivity has never been more essential. Fixed-mobile convergence is the future of the telecom sector in Europe, and now Switzerland will have a true national challenger to drive competition and innovation for years to come. We look forward to welcoming Sunrise employees to the Liberty and UPC family and congratulate them and the board on their success.

“This transaction is another significant step on our path to create fixed-mobile champions in all of our core markets, crystallising the value of our superior broadband networks and driving long-term, sustainable free cash flow growth. Even after this deal, and assuming completion of our recently announced UK transaction, we will continue to have approximately $7 billion of liquidity to drive value-creation for shareholders,” he added.

“Sunrise has delivered on its quality-focussed strategy and built one of the best mobile networks worldwide,” said Andre Krause, chief executive of Sunrise. “We have successfully gained market share in all our businesses, underpinned by our strong focus on customer centricity, service excellence, innovation and quality offering. We are very proud of what our employees have achieved and believe that the combination with UPC Switzerland will enable the combined company to become the leading fully converged challenger in the market.”

The combined business will have 3.17bn Swiss francs in revenue, with a customer base comprising 2.1 million mobile subscribers, 1.2 million broadband subscribers and 1.3 million TV subscribers — around a 30 percent market share in each segment, according to Liberty Global.

News: Liberty Global surprises with $7.4 billion deal to buy Sunrise in latest telecoms consolidation

One in three UK firms expect to cut jobs, says new research

BY Fraser Tennant

One in three companies in the UK expect to make redundancies in the third quarter of 2020, according to a new report by the Chartered Institute of Personnel and Development (CIPD) and the Adecco Group.

The report, based on a survey of more than 2000 employers, found that employment confidence has fallen in all three sectors of the economy: private, public and voluntary. In the private sector, 38 percent of firms plan to make redundancies, compared to 16 percent in the public sector.

Overall, the figures represent a 50 percent jump in the number of employers expecting to cut jobs compared to three months ago.

“Until now, redundancies have been low – no doubt due to the Job Retention Scheme – but we expect to see more redundancies come through this autumn, especially in the private sector once the scheme closes,” said Gerwyn Davies, senior labour market adviser at the CIPD. “Hiring confidence is rising tentatively, but this probably will not be enough to offset the rise in redundancies and the number of new graduates and school leavers entering the labour market over the next few months.”

That said, amid the gloomy forecast, there is some positivity. “Nearly half (49 percent) of UK employers are planning to recruit over the next three months,” said Alex Fleming, country head and president of staffing and solutions at the Adecco Group UK and Ireland. “We are also seeing more candidates applying for high skilled roles, which aligns with the trend of people sourcing alternate forms of education in order to upskill and expand their knowledge.”

Other key findings of the report include: (i) a large variation across sectors in terms of the net employment balance, with employment confidence highest in healthcare and public administration, and lowest in hospitality, transport and storage, and retail; (ii) in terms of the nations and regions, confidence is highest in Wales and North East England, and lowest in the West Midlands and Scotland.

In addition, more than four in 10 employers have implemented recruitment freezes. The proportion of organisations adopting a recruitment freeze is significantly higher for the private sector than the public sector, especially in hospitality, business services and IT.

“Businesses must demonstrate resilience and adopt new approaches to closing the skills gap by investing in upskilling and reskilling workforces,” concluded Mr Fleming. “Creating a positive workplace culture is also integral to maintaining focus, engagement and motivation among existing employees.”

Report: Labour Market Outlook: Summer 2020