Two buyout firms vie for patch maker LTS Lohmann -sources

Reuters

* Wendel, Nordic Capital hand in final bids - sources

* Bids value LTS Lohmann at about 1.2 bln euros - sources

* Hisamitsu, EQT, Blackstone, KKR drop out - sources

FRANKFURT, Nov 25 (Reuters) - The bidding for German medicalskin patch maker LTS Lohmann has turned into a two-way racebetween buyout firms Wendel and Nordic Capital, valuing thecompany at about 1.2 billion euros ($1.6 billion), three peoplefamiliar with the matter said.

Nordic Capital may be looking to combine LTS Lohmann withanother skin patch maker it agreed to buy last month, Acino. Nordic had teamed up with Avista Capital Partners toacquire the Swiss firm, which makes a contraceptive patch forBayer.

The sources said that Japan's Hisamitsu Pharmaceutical and private equity house EQT were no longer beingconsidered as suitors by LTS Lohmann's owners, which includedrug major Novartis.

Interest from Blackstone, which had been looking tocombine LTS Lohmann with its drug contract manufacturingsubsidiary Catalent, has cooled, the sources added. KKR,which had been seeking to complement its hard capsules makerCapsugel, has also lost interest, they said.

Wendel of France, Nordic Capital of Sweden, EQT, KKR,Hisamitsu and Blackstone all declined to comment.

Officials at LTS Lohmann and Novartis were not immediatelyavailable for comment.

LTS Lohmann makes about 286 million euros in annual salesfrom nicotine and other medical patches to treat conditionsincluding Parkinson's and Restless Legs Syndrome.

Patches of the type made by the firm have becomeincreasingly important in the drugs industry since they offer aconvenient and reliable way of delivering a variety ofmedicines.

The bids value the group - which developed the firstnicotine patch for the U.S. market, launched in 1991 - at about12.6 times earnings before interest, taxes, depreciation andamortisation (EBITDA) of about 95 million euros.

Listed healthcare companies in Europe trade at a multiple ofabout 11, data from Thomson Reuters StarMine show.

Novartis holds a 43 percent stake in LTS Lohmann, whileGerman billionaire Dietmar Hopp, who co-founded software giantSAP, holds about 30 percent. German investment companyBWK owns a 24 percent stake.

Spokesmen for Hopp's investment vehicle and for BWK declinedto comment.

A key question for the future owner will be whether LTSLohmann can succeed in preventing generic drugmakers fromlaunching cheap copies of its Exelon patch for mild to moderatedementia. Novartis has sued Actavis for trying to bringits version to market.

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