Sanofi’s proposed $11.6 billion Acquisition of Bioverativ


 

Overview of the deal

  • Acquirer: Sanofi SA (Paris: SAN)

  • Target: Bioverativ. (NASDAQ: BIVV)

  • Estimated value: $11.6bn

  • Announcement date: 3/12 - 2017

  • Acquirer Advisors: Lazard

  • Target Advisors: Guggenheim Securities and JP Morgan Chase

There are two main reasons driving Sanofi’s decision to acquire Bioverativ. Firstly, in its 2020 roadmap, the company stated that it aims to grow its product portfolio by launching new drugs and making further investment in R&D. As such, the acquisition of Bioverativ, who are the leading specialist in the US for Haemophilia treatment, is a crucial step forward for Sanofi’s expansion into this market which is worth approximately $10 billion in annual sales, and is expected to grow by more than 7 percent per year through to 2020.


Secondly, revenue synergies could be realised by leveraging Bioverativ’s products with Sanofi’s pre-existing infrastructure in emerging market economies. Specifically, the current absence of substantial sales revenue of Bioverativ in EM countries combined with the strong presence of Sanofi in these countries should allow sales to climb rapidly as Sanofi introduces new products into new markets (a form of revenue synergy).

WSJ suggests that although Sanofi has been a leading player treating rare diseases, the company’s need to expand its portfolio in order to keep up with the competition is the main motive behind the deal. Further, WSJ highlights that Sanofi would bolster its thriving rare-disease business and gain access to the market for treatments for haemophilia, a $10 billion market.

Company details (Sanofi S.A.)

Sanofi S.A. is a French multinational pharmaceutical company and as of 2013 it is the world's fifth-largest by prescription sales.


- Founded in 2004 and headquartered in Paris, France

- President and CEO: Olivier Brandicourt (Since 2015)

- Number of employees: 110,000

- Market Cap: $80.82bn - EV: $105.77bn

- LTM Revenue: $33.8bn - LTM EBITDA: $11.3bn

- LTM EV/Revenue: 3.12x - LTM EV/EBITDA: 9.36x

Company details (Bioverativ)

Bioverativ is a global biopharmaceutical company with a product portfolio geared towards transforming the lives of people with haemophilia and other rare blood disorders.


- Founded in 2016 and headquartered in Waltham, US

- CEO: John G. Cox (Since 2016)

- Number of employees: 400

- Market Cap: $11.21bn - EV: $10.77bn

- LTM Revenue: $1.17bn - LTM EBITDA: $462m

- LTM EV/Revenue: 9.2x - LTM EV/EBITDA: 23.31x

Projections and assumptions

  • Short-term consequences