Australian pharma firm CSL buys US rival Talecris for $3.1 billion

13 August 2008

Australia's CSL Ltd., the world's second largest maker of blood plasma products, is buying smaller US rival Talecris Biotherapeutics Holdings Corp for $3.1 billion, to boost its presence in the fast-growing biopharmaceutical industry.

While CSL and Talecris are No.2 and No.3 in the list of plasma products manufacturers, Illinois-based Baxter International holds the top spot. Even post acquisition, it will remain numero uno by a margin of 25 per cent.

Talecris, which operates 56 plasma collection centers and two manufacturing facilities in the United States, is being sold by its private equity owners, Cerberus Partners and Ampersand Ventures. The acquisition is the largest ever made by an Australian healthcare company.

Analysts said the deal would lift Melbourne-based CSL's 2008/09 earnings per share by 10 percent, driven largely by cutting costs. The deal represents a price to core earnings multiple of 12.7, which fund managers said was fair, but CSL's scale of operations would enable it to extract cost savings.

CSL, which makes products out of blood plasma to treat immune deficiencies and blood disorders, like hemophilia, also reported a 30 per cent rise in fiscal 2008 profit to A$702 million. It also makes vaccines, like flu vaccine and licensed its cervical cancer vaccine to Merck & Co Inc.

Talecris, based in Research Triangle Park, North Carolina, generated $1.2 billion sales for the year to end-June and earned core earnings of $258 million.