CVC Capital Partners to Sell Its 60% Stake in Italian Genetic Group, Hopes for a Valuation of Around 700 Million Euros. The Luxembourg Private Equity Giant Has Hired Rothschild as an Advisor to Find Potential Buyers. The Goal is to Complete the Sale in the First Half of 2024, but There is No Guarantee the Deal Will Go Through, According to People Familiar with the Matter.

Genetic Group, founded in 2000 and based in Salerno, Italy, manufactures technology for asthma inhalers, nasal sprays, as well as medical devices for treating respiratory diseases and eye conditions. The founding family around Rocco Pavese, which retained a minority stake after the acquisition by CVC in 2020, wants to remain a shareholder even in the event of a sale.

Since the acquisition by CVC, the company has doubled its earnings before interest, taxes, depreciation, and amortization (EBITDA) and now generates around 50 million euros annually. Contract manufacturing is becoming more significant as large pharmaceutical companies outsource their own production to reduce costs. The market volume is estimated to exceed 220 billion dollars by 2030, according to data from consulting firm Alvarez & Marsal.

The demand of private investment firms for specialized contract manufacturers in the pharmaceutical sector remains strong. This year, companies like FairJourney Biologics and Avid Bioservices have already been acquired by private equity groups. Genetic, which markets around 50 of its own products in over 30 countries, is also likely to attract interest from potential investors.

CVC holds the stake through its Strategic Opportunities Fund, which is typically designed for long-term investment holding. CVC itself went public in Amsterdam in April and has since achieved a 60 percent increase in its stock price, bringing the market capitalization to over 23 billion euros.