Sirona Dental says $2 billion-plus deals possible

LONDON Fri Mar 25, 2011 12:07pm EDT

Related Topics

LONDON (Reuters) - Sirona Dental Systems Inc (SIRO.O) is open to $2 billion-plus takeovers, given appropriate financing, and to deals outside its core business of dental equipment and software, Chief Executive Jost Fischer said.

Sirona, which has a market value of about $2.7 billion, specializes in equipment such as high-tech dental chairs, X-ray machines and computer-aided design systems for dentists.

Fischer declined to comment on whether Sirona could expand into dental implants by buying part of Astra Tech, the medical technology business AstraZeneca Plc (AZN.L) is selling, but said it would evaluate all promising dental deals.

"Sirona does not rely on acquisitions for growth but certainly we'll look at everything that seems to be interesting," Fischer, who is chairman and chief executive, told Reuters in a telephone interview on Friday.

However, Fischer said there was "no substance" to the idea Sirona could team up with a private equity firm to bid for Astra Tech -- which is the world's no. 3 dental implants firm, but also active in other areas such as urology. Sirona focuses wholly on the dental sector.

Fischer said Sirona's mergers and acquisitions (M&A) strategy targeted development prospects; early-stage companies and products; and deals to build up in particular business segments and countries.

A fourth leg of the strategy was "out of base" deals, he said, to push Sirona "into more the consumer part of dental."

As for deal sizes, Fischer said: "I wouldn't see a real ceiling because it always depends how you structure the deal," adding that Sirona had cut debt so that it had "almost no gearing." Net debt stood at $102.5 million at end-2010, down from $404.8 million two years earlier.

Asked if that could include $1 billion-plus deals, he agreed and added: "We could have 2 <billion dollars> or more if the financial engineering would be fine."

Such a deal would be bigger than the 2005 takeover of U.S. dental imaging specialist Schick Technologies Inc, which gave Sirona a U.S. listing. That deal was worth $1.47 billion including debt, Thomson Reuters data show.

ASTRA TECH

In February, people familiar with the matter said about 20 bidders, including private equity firms and medical technology companies, were readying offers for all or parts of Astra Tech, which Astra hopes could fetch $2 billion.

Last week Bloomberg said Zimmer Holdings (ZMH.N), Biomet Inc, Nobel Biocare Holding NOBN.VX, Straumann Holding (STMN.S), Dentsply (XRAY.O), Cinven CINV.UL and Nordic Capital were among bidders, while Dow Jones named other private equity firms including Permira PERM.UL, Bain, Bridgepoint, Warburg Pincus WP.UL and Carlyle CYL.UL.

Sirona, the former dental unit of Siemens AG (SIEGn.DE) , has itself been owned by a trio off private equity firms -- first Britain's Permira, then Sweden's EQT, and most recently U.S. firm Madison Dearborn MDPRT.UL, which retains a stake.

(Reporting by Quentin Webb; editing by Douwe Miedema)

FILED UNDER: