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UPDATE 1-Bid target Stada forecasts 2017 profit gain of up to 11 pct
March 1, 2017 / 2:40 PM / 9 months ago

UPDATE 1-Bid target Stada forecasts 2017 profit gain of up to 11 pct

* Forecasts net income of 195-205 mln euros in 2017

* Three buyout firms vie for generic drugmaker (Adds background on bidding process, multiples)

By Ludwig Burger and Maria Sheahan

FRANKFURT, March 1 (Reuters) - German generic drugmaker Stada, which has attracted three private equity suitors, said it was targeting an increase in adjusted earnings of up to 11 percent this year, in line with consensus forecasts.

Stada is opening its books to Advent, Cinven and Bain Capital after an activist shareholder pushed through personnel changes and a strategic overhaul last year.

In an unscheduled statement on Wednesday, Stada said net income, adjusted for one-off items, was likely to rise to 195-205 million euros ($205-$216 million), from 184 million last year.

That was in line with the average analyst estimate for 200 million euros, according to a figure on Stada’s website. Its shares edged 0.1 percent higher to 57.21 euros at 1405 GMT.

Advent has offered 58 euros per share for Stada, valuing the equity at up to 3.6 billion euros, or more than 4.7 billion when including its net debt.

That amounts to 10.8 times the adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) expected for this year.

Larger generics companies Teva and Mylan are trading at multiples of about 8.7, while for Richter Gedeon , an eastern European rival, the multiple is almost 11. Takeover prices typically come a considerable premium to trading multiples.

Stada, which also makes branded non-prescription treatments and diagnostic kits, said fourth-quarter adjusted net income rose to 44 million euros ($46 million) from 39 million a year earlier and slightly above the average estimate of 42 million euros.

But reported net earnings slipped to a loss of 7.4 million euros in the three months through December, hurt by restructuring charges, compared with a year-earlier profit of 20.5 million, it said. ($1 = 0.9500 euros) (Editing by Georgina Prodhan/Keith Weir)

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