Nycomed: Changing (Private) Hands

Buy-outs are the latest fashion in the health care industry. With public markets closed, private equity groups are looking to put large amounts of capital to work in companies that can survive without continued access to new money. In pharmaceuticals, the opportunities have never been better: drug companies are willing to sell off what they consider peripheral businesses which nonetheless may be generating substantial cash flows. Meanwhile, pharmaceutical valuations are at record lows. Buy-outs, in short, are available and look cheap—and thus even players who have done only sporadic pharmaceutical investing are coming into the market. Earlier this year, for example, Advent Partners bought Viatris--the remains of Asta Medica's pharmaceutical business--for €375 million ($347 million), in the largest pharmaceutical buyout [See Deal]. (See "Viatris: Shedding the Past," In Vivo Europe Rx, October 2002 [A#2002600073].)

But the estimated $1.1-1.3 billion stumped up by CSFB Private Equity, The Blackstone Group and NIB Capital Private Equity for...