Sanofi Mandates Lending Banks for €20B Consumer Health Division Carve-Out; Sale to Start Shortly

French pharmaceutical giant Sanofi has mandated Bank of America Merrill Lynch, BNP Paribas, Goldman Sachs and Morgan Stanley for the carve-out of its consumer health division, sources told Reorg.

The auction is expected to start in the coming weeks, one of the sources said.

Appointment of the banks follows a beauty parade held by the seller on April 22, as reported. Sanofi was looking to add lending banks to the earlier-appointed Rothschild to guide the disposal, which is being run as a dual track, with a sale and an IPO under consideration.

Sanofi met prospective private equity bidders the week of March 18 to gauge appetite for the division and discussed it in a board meeting held the week after, as reported. Potential bidders for the division are considering debt packages of about €7.5 billion and approaching both banks and direct lenders for the buyout financing, Bloomberg reported.

Buyout firms including Advent, Blackstone, CVC, KKR and CD&R have been circling the Sanofi unit, according to a Bloomberg report.

While sale of the division is being considered, an IPO is the preferred route for the conglomerate, according to the statement issued by the company in October 2023. At that time, Sanofi said that it planned to separate the division, which sells over-the-counter products including Phytoxil cough syrups and Icy Hot pain relief gels. “The most likely path would be through a capital markets transaction, by creating a listed entity headquartered in France,” the statement said.

On a reported basis, as shown in the financial figures below, Sanofi fiscal year 2023 sales reached €43.07 billion, up 0.2% from FY 2022. Similarly, in the fourth quarter of 2023 on a reported basis, sales were up 1.8% to €10.919 billion from €10.725 billion in the same period a year earlier.

Sales by geographical region shown below:
 

A breakdown of global business unit sales for the fourth quarter of 2023 is shown below:
 

Reorg calculates FY 2023 adjusted EBITDA at €9.464 billion, derived from operating income and adding back depreciation, amortization and impairment of property, plant & equipment, and software. This represents a decrease of 23% or €2.779 billion compared with the previous year.

The company’s key financial figures are shown below:
 

Sanofi has a market capitalization of about €113.97 billion as of May 21, according to Euronext Paris.

According to management’s reports, Sanofi’s net debt increased by €1.356 billion in FY 2023 to close the period at €7.793 billion.

Goldman Sachs and Morgan Stanley declined to comment. Sanofi, Bank of America Merill Lynch and BNP Paribas did not respond to Reorg’s request for comment by the time of publication.