* Evonik, LTS owners unable to agree on valuation - sources
* Sellers renew talks with Wendel, Nordic on LTS - sources
By Arno Schuetze and Matthias Inverardi
FRANKFURT/DUESSELDORF, March 12 Germany's Evonik
Industries AG has dropped out of talks to buy medical
skin patch maker LTS Lohmann, two people familiar with the deal
said on Wednesday, sending the sellers back to square one in
their search for a buyer.
After showing initial interest in LTS Lohmann, Evonik, a
speciality chemicals group with a strategic aim of expanding in
the health sector, had bowed out of the auction a few months
ago, only to be asked back to the negotiating table before the
Evonik has now decided not to pursue its exclusive talks
with LTS Lohmann's owners - Swiss drugmaker Novartis AG
, German billionaire Dietmar Hopp and German investment
company BWK - as the parties' views on valuation proved to be
too far apart, the people said.
Evonik, Novartis and BWK declined to comment. Hopp's
investment company was not immediately available for comment.
The sellers will now try to rekindle the interest of private
equity groups Wendel SA of France and Sweden's Nordic
Capital, which had offered to buy LTS Lohmann for about 1.2
billion euros ($1.7 billion) but were kicked out of the race as
LTS's owners hoped for a higher offer from Evonik.
A person familiar with one of those possible bidders noted
LTS Lohmann's outlook had weakened since it was initially
involved in bid talks.
"We will take our time to look into the matter again, but
any new bid will have to account for the fact that a new
business plan with lower growth prospects has been presented in
the meanwhile," the person said, without giving any further
At least one of LTS Lohmann's owners had held out for a
valuation of 1.4 billion euros, or 15 times the company's
expected earnings before interest, tax, depreciation and
amortisation (EBITDA) of about 90 million, sources familiar with
the deal previously said.
By comparison, European healthcare equipment and services
companies as a whole trade at about 11 times estimated EBITDA,
while for pharmaceutical companies the multiple is 11.2,
according to Thomson Reuters data.
Wendel and Nordic declined comment.
LTS Lohmann, which competes with unlisted AMW GmbH,
Beiersdorf's Tesa Labtec unit, Acino, and
U.S. conglomerate 3M, makes about 286 million euros in
annual sales from nicotine and other medical patches to treat
conditions including Parkinson's disease and Restless Legs
A key question for any future owner will be whether LTS
Lohmann can succeed in preventing generic drugmakers from
launching cheap copies of its Exelon patch for mild to moderate
dementia. Novartis has sued Actavis for trying to bring
a version to market.