EXCLUSIVE: Advent pulls bid for Pfizer's Brazil venture - sources

By Tatiana Bautzer

SAO PAULO (Reuters) - U.S. private equity firm Advent International Corp has withdrawn from a bidding process to acquire Pfizer Inc's Brazilian generic drugs joint venture, leaving rival Bain Capital LP as the only contender for the company, two people with direct knowledge of the matter said on Thursday.

Last November, Advent and a number of companies placed non-binding offers to buy Laboratório Teuto Brasileiro SA, commonly known as Teuto | Pfizer, the people said. Still, Advent failed to place a binding offer, for reasons the people declined to discuss.

Bain Capital, which has also participated in the eight-month old process to sell Teuto | Pfizer, has not yet presented a final, binding offer for the company, which owns Latin America's largest generic drugs plant. Pfizer owns 40 percent of the venture, with the Melo family still owning the remaining stake.

 

Reuters reported in October that the shortlist of suitors included Advent, Bain and Torrent Capital Investment Corp. Buyout firms presented more attractive terms than other drugmakers initially contacted, including Israel's Teva Pharmaceutical Industries Ltd and Mylan NV.

Pfizer and the Melos put the company up for sale last July and hired the investment banking units of Goldman Sachs Group Inc and Grupo BTG Pactual SA as advisers. Shareholders had expected to fetch between 1 billion reais and 1.5 billion reais ($324 million and $486 million) for the venture.

Advent, Bain Capital, Pfizer and Teuto, which is located in the midwestern Brazilian city of Anápolis, declined to comment, as well as the banks involved.

The people, who requested anonymity since the process remains private, said that a failure to find a buyer could rekindle a dispute between Pfizer and the Melos. The rift stems from an option to buy out the family between 2014 and 2016, taking into account a pre-defined valuation of 14.4 times operational profit for Teuto | Pfizer, the people said.

Pfizer backpedaled on previous plans to exit the generic drugs segment late last year. Still, performance of the business in Brazil, the world's No. 3 market for generics, has hammered rivals like France's Sanofi SA , which has dealt with excess inventory at a local unit.

In addition, Brazil's harshest recession ever has put the brakes on the sale of medicines, which expanded 11.5 percent last year. That number compared with 15 percent growth two years ago.

(Editing by Guillermo Parra-Bernal and Bernard Orr)