Exclusive: Advent, Avista near deal for UCB’s Kremers Urban

Target: Kremers Urban Pharmaceuticals Inc.

Price: close to $2 billion

Seller: UCB SA

Potential Buyer: Consortium including Advent International Corp and Avista Capital Partners

Advent and Avista have prevailed in an auction for Kremers Urban, which attracted interest from other private equity firms as well as specialty drugmaker Akorn Inc, the people said in late October.

Advent’s and Avista’s team is now in the final stages of negotiating the acquisition of Kremers Urban for close to $2 billion, the people said. The negotiations could still end without a deal, the people cautioned.

The sources asked not to be identified because the talks are confidential. Advent, Avista and UCB declined to comment, while Akorn did not respond to requests for comment.

A sale of Kremers Urban would come as more private equity firms consider acquiring the mature drug portfolios of pharmaceutical conglomerates such as GlaxoSmithKline Plc in a bid to avoid expensive leveraged buyouts of companies.

Based in Princeton, New Jersey, Kremers Urban is a maker of generic drugs with high barriers to market entry. Its product for the treatment of attention deficit disorder was approved by the U.S. Food and Drug Administration last year.

Kremers Urban was acquired by Schwarz Pharma Manufacturing in the mid 1990s, before Schwarz was acquired by UCB in 2006.

Reuters first reported in August that UCB was working with investment bank Lazard Ltd on the sale of the business.

Based in Brussels, UCB focuses on drugs for the treatment of conditions in the immune system and the central nervous system. It generated revenue of 3.4 billion euros ($4.3 billion) in 2013, and has a market value of 12.8 billion euros.

Reporting by Olivia Oran and Greg Roumeliotis of Reuters news service in New York.