EXCLUSIVE Buyout fund Ardian makes $1.2 bln swoop on Italy's Biofarma Group - sources

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LONDON, Jan 16 (Reuters) - European private equity firm Ardian has clinched a deal to buy Italian drug firm Biofarma Group for about 1.1 billion euros ($1.26 billion) - its second pharmaceutical deal in less than a year, two sources with knowledge of the matter told Reuters.

The transaction, which could be announced as soon as Monday, will see Ardian expanding in the lucrative dietary supplement market, an industry which has been booming during the COVID-19 pandemic as people have turned to multivitamin products to boost their immunity.

Biofarma and Ardian were not immediately available for comment.

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Biofarma, led by Chief Executive Maurizio Castorina, specialises in food supplements, probiotic-based drugs and cosmetics. It has revenue of about 330 million euros and runs four manufacturing plants and three R&D labs in northern Italy.

The global nutraceuticals market was valued at $454 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 9% up to 2030, according to U.S. consulting firm Grand View Research.

The growing demand for dietary supplements and functional food is expected to be a key driving factor in the post-pandemic world.

The deal values Biofarma at more than 20 times its core earnings of 50 million euros, the sources said.

It is Ardian's second investment in a European pharmaceutical contract development and manufacturing (CDMO) player over the past 12 months after the Paris-based investment firm backed EQT's purchase of Swedish firm Recipharm in June.

Japanese bank Nomura worked with Ardian on the transaction as its financial adviser and financing provider while Canson Capital Partners and Ethica advised White Bridge Investments, the sources said.

Ardian entered exclusive talks to buy Biofarma from owner White Bridge Investments earlier this year, after trumping a rival offer from buyout fund BC Partners, one of the sources said, speaking on condition of anonymity.

BC Partners was not immediately available to comment.

For Milan-based White Bridge, the deal ranks as its biggest exit since the firm was launched in 2013.

White Bridge, led by former BC Partners investor Marco Pinciroli, took control of Biofarma in 2019 by merging it with its portfolio company Nutrilinea.

The combined group, which initially had overall revenue of 170 million euros and a workforce of 600, has been growing through a series of bolt-on acquisitions including the purchase of a majority stake in the finished products division of rival Giellepi in December.

($1 = 0.8761 euros)

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Reporting By Pamela Barbaglia; Editing by Emelia Sithole-Matarise

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