July 17, 2014 / 9:47 AM / 5 years ago

Novartis, BWK sell stakes in patch maker LTS Lohmann

The logo of Swiss drugmaker Novartis is seen at its headquarters in Basel October 22, 2013. REUTERS/Arnd Wiegmann

FRANKFURT (Reuters) - Switzerland’s Novartis NOVN.VX and German investment company BWK are selling their stakes in medical skin patch maker LTS Lohmann to fellow shareholder Dietmar Hopp, having failed to find a third-party buyer for the business.

The owners of LTS have been seeking a buyer for the company, which competes with unlisted AMW GmbH, Beiersdorf’s (BEIG.DE) Tesa Labtec unit, Acino ACIN.S, and U.S. conglomerate 3M (MMM.N), but could not agree a price with potential buyers.

German billionaire Hopp, known mostly for being the co-founder of business software maker SAP (SAPG.DE), had been the most insistent on price, people familiar with the negotiations said at the time.

Under the agreement, Hopp will increase his holding in LTS via investment firm Dievini Hopp BioTech to 96 percent from about 30 percent.

Novartis said on Thursday it expected an after-tax gain of about $400 million from the sale of its 43 percent stake in LTS when the deal closes later this year. BWK, with a 24 percent holding in LTS, did not disclose financial details.

LTS generates more than 300 million euros ($406 million) in annual sales from nicotine and other medical patches to treat conditions including Parkinson’s disease and Restless Legs Syndrome.

Sources told Reuters in March that Germany’s Evonik Industries AG (EVKn.DE) had dropped out of talks to buy LTS, sending the sellers back to square one in their search for a buyer.

The sellers had also hoped to rekindle the interest of private equity groups Wendel SA (MWDP.PA) of France and Sweden’s Nordic Capital, which had offered to buy LTS for about 1.2 billion euros but were kicked out of the race as LTS’s owners hoped for a higher offer from Evonik.

Reporting by Maria Sheahan; editing by Thomas Atkins and Tom Pfeiffer

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