Bristol-Myers Squibb completes sell-off of ConvaTec to PE firms

Biopharmaceuticals firm Bristol-Myers Squibb announced last Friday that Nordic Capital Fund VII and Avista Capital Partners have completed their acquisition of a business unit, the global leader in wound therapeutics and ostomy care products, ConvaTec, which the company had agreed to divest to the two PE firms for $ 4.1 billion in May. (See: Bristol-Myers Squibb sells ConvaTec to PE firms for $4.1 billion) 

Bristol-Myers Squibb, which is already the world's No14 pharmaceutical company by sales, has been increasing its focus on biopharmaceuticals and developing biotechnology medicines, which have a much higher profit margin, than businesses such as wound care.Earlier in January it sold its medical imaging business to Avista for $525 million and plans to divest 10 to 20 per cent of its Mead Johnson nutritional business through an initial public offer by year-end.

Moreover, the divestiture will give the firm sufficient free resources to pursue its acquisitions; on 30 July it announced plans to acquire its cancer drug partner, ImClone Systems Inc, in which it already has a 17-per cent stake, in an all-cash deal for approximately approximately $4.5 billion (See: Bristol-Myers Squibb to acquire ImClone Systems for $4.5-billion).

For nearly 30 years, ConvaTec has been a pioneer in developing and marketing innovative wound therapeutics and ostomy care products.  

Citigroup Global Markets Inc. and Morgan Stanley & Company Inc. served as financial advisors for Bristol-Myers Squibb and Cravath, Swaine & Moore, LLP, served as legal counsel for the company.

Bear Stearns International Limited acted as financial advisor for Nordic Capital and Avista Capital Partners, JPMorgan plc acted as global coordinator in connection with the debt financing, and White & Case LLP served as legal counsel to Nordic and Avista.