Talecris IPO To Repay Debt, Not Sponsors

After a thwarted exit attempt earlier this year, Cerberus Capital Management and Ampersand Ventures may again be on their way toward monetizing their investment in a healthy Talecris Biotherapeutics Inc., the former blood plasma business of Bayer AG. But the road won’t be as lucrative as originally intended.

On Sept. 11, the maker of treatments for immune-system diseases filed for an IPO that could gross as much as $894 million. However, the sum is largely earmarked to pay down the company’s 10-figure debt load, rather than to funnel to the general or limited partners of Cerberus Capital and Ampersand Ventures. No specific date has been set for the IPO, through which the company plans to list on the NASDAQ under the ticker symbol “TLCR” and sell as many as 44.7 million shares at between $18 and $20 each.

Talecris Biotherapeutics has come a long way since it was a division of German pharmaceutical giant Bayer. Since 2005, when Cerberus Capital and Ampersand Ventures carved it out of its corporate parent in a $300 million deal, the company went from generating $846.5 million in net revenues to more than $1.4 billion. In the six months ended June 30, 2009, the company generated net revenue of $747.4 million, up 20.1 percent from the comparable 2008 period.

The company’s financial sponsors have already profited from their investments. In December 2006, Cerberus Capital and Ampersand Ventures completed a $1.36 billion recapitalization of Talecris Biotherapeutics, through which the two firms paid themselves a $760 million cash dividend and retired the company’s then-modest debt load of $203 million, according to the company’s prospectus filing dated Sept. 11, 2009. Under its recapitalized structure, the company took on a $700 million first-lien term loan due December 2013, a $330 million second-lien term loan due December 2014, and a $325 million revolving credit facility due December 2011.

That payout now appears to have limited any furhter financial upside for the two firms, since the company, still burdened under about $1.1 billion in debt, must begin digging itself out. Indeed, the pending IPO is likely small consolation to Cerberus Capital and Ampersand Ventures, which were both prepared earlier this year to fully cash out of Talecris Biotherapeutics via a $3.1 billion sale to Australian biopharmaceutical company CSL Ltd. In June, however, the deal was stymied by the Federal Trade Commission over concerns that the strategic acquisition would substantially reduce competition in the U.S. markets for certain plasma-derivative protein therapies.

Calls to New York’s Cerberus Capital and Wellesley, Mass.-based Ampersand Ventures were not returned by press time.