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GlaxoSmithKline Plc’s consumer unit is drawing interest from private equity firms as the pharma giant prepares to split off the business, people with knowledge of the matter said.
The London-listed drugmaker’s advisers are informally fielding interest in the operations alongside preparations for a listing, the people said, asking not to be identified because the information is private. Advent International, Blackstone Inc., Carlyle Group Inc., CVC Capital Partners, KKR & Co. and Permira are among potential suitors evaluating the business, according to the people.
The consumer unit could also attract some of the world’s biggest pharmaceutical and consumer goods companies, the people said. The unit could be valued at 40 billion pounds ($54 billion) or more in any deal, the people said.
Shares in Glaxo rose as much as 4.8% in London trading Tuesday. The stock was up 3.2% at 11:05 a.m., giving the company a market value of about 72 billion pounds.
Glaxo is working with Goldman Sachs Group Inc. and Citigroup Inc. on preparations for a separate listing of the business, Bloomberg News reported in June. It’s also been fending off pressure from activist investors Elliott Investment Management and Bluebell Capital Partners.
Any deal for Glaxo’s consumer business would rank as one of the largest acquisitions globally this year, data compiled by Bloomberg show. Given the size of the potential deal, buyout firms could end up teaming up for an acquisition and rope in sovereign wealth funds or pension managers for more firepower, the people said.
Engaging with potential buyers allows Glaxo to get a sense of whether it could achieve a higher valuation for the unit through a listing or outright sale. Fielding interest without launching a formal auction process could also help the company avoid the pressure of needing to sell if suitors don’t offer an attractive price.
Deliberations are ongoing, and there’s no certainty they will lead to a transaction, the people said. Spokespeople for Blackstone, Carlyle, KKR and Permira declined to comment. Representatives for Glaxo, Advent and CVC didn’t immediately reply to requests for comment.
The interest comes on the back of record capital in the buyout industry and signals growing appetite from these investment firms to look at larger transactions. A consortium led by Blackstone, Carlyle and Hellman & Friedman agreed in June to buy medical supply company Medline Industries Inc. in a deal valued at more than $30 billion.
(Adds share price move in fourth paragraph.)
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