When CLS Ltd. (AX: CSL) agreed to buy Talecris Biotherapeutics Holdings Corp. last week for $3.1 billion, no one could have predicted the size of the return for Talecris’ investors.
The deal provides a massive return for Cerberus Capital Management and Ampersand Ventures, according to Talecris’ S-1 filing.
The two private equity firms bought Talecris, a U.S. operator of 56 blood plasma collection centers and two manufacturing facilities, two years ago from Bayer AG.
Cerberus and Ampersand will receive about $2 billion combined, which is 22x their equity investment. No, that isn’t a typo—the return is 22x.
Moreover, there are few private equity firms that need a grand slam more than Cerberus, which is being pummeled almost daily by Chrysler (not to mention a recent profit dive Aozora Bank).
One other note, this deal is further indication that the health care services sector is still thriving, particularly as Boomers keep graying. Energy gets all the headlines, but it’s not the only sector that’s managed to be (near) recession-resistant.
CSL is partially financing the deal via a $1.55 billion stock placement being managed by Merrill Lynch. Talecris filed for an IPO last summer, but is expected to withdraw the filing once this transaction closes.