Cerberus Sells Plasma Products Firm Talecris for $3.4 Billion

Spain may be embroiled in a credit crisis, but that hasn't stopped some of its companies from striking big deals. Take Grifols SA: This developer of medical products has agreed to shell out $3.4 billion to acquire Talecris Biotherapeutics Holdings (TLCR).

With a market cap of $2.36 billion, Grifols had to put together a significant financing package. This was no easy feat -- but does show that quality deals can get done.

The transaction is a big win for Talecris' private-equity sponsor, Cerberus Capital Management, which owns 49% of the company. Overall, Cerberus expects to net a more than $2 billion profit from its purchase of Talecris, a sharp contrast with the firm's recent disastrous deals, such as for Chrysler and GMAC.

A Look at Talecris

Talecris is one of the largest producers of plasma-derived protein therapies in the world, treatments for problems such as chronic inflammatory demyelinating polyneuropathy, primary immune deficiencies, alpha-1 antitrypsin deficiency, bleeding disorders and so on. Roughly 77% of the company's revenues come from two flagship drugs, Prolastin and Gamunex. Talecris has nearly 280 scientists and support staff as well as a solid infrastructure platform.

Interestingly enough, Talecris is really an amalgam of different deals struck by Cerberus. The key transaction was a $590 million transaction from Bayer AG, in which it acquired that company's plasma business in 2005 and renamed it Talecris.

A couple of years ago, Cerberus tried to sell Talecris to Australian biotech company CSL for $3.1 billion. However, the antitrust scrutiny was too intense and the deal fell apart.

So late last year, Cerberus took Talecris public, selling a majority stake in the business and raising a hefty $950 million.

Since then, Talecris has continued to expand. Last year, the company saw a 12% increase in sales to $1.53 billion and a net profit of $153.9 million.

Antitrust Issues Unlike to Impede Deal

In light of the antitrust issues with the CSL deal, there will definitely be scrutiny of the Grifols acquisition. The $7 billion plasma market is highly consolidated.

However, the market footprint of the combined firms in this case would not be as significant. Grifols, unlike CSL, has a fairly small presence in the U.S. market, which makes it more likely that the deal will pass muster with regulators in Washington and close in the fourth quarter.