Blackstone to make $500m pharma investment(3)

Set to bolster its pharmaceuticals portfolio, Blackstone has agreed to make a $500 million minority investment in Florida-based Stiefel Laboratories.

The Blackstone Group will strengthen its global pharmaceuticals portfolio with a $500 million (€363 million) growth investment in Stiefel Laboratories, a Florida-based pharmaceutical company that specialises in dermatology.

The minority investment, expected to close this week, allows Blackstone to appoint one person to Stiefel’s board of directors, but the Stiefel family will retain control and majority ownership of the company.

Stiefel “considered a number of private equity firms and selected Blackstone through an evaluative process that examined a number of factors, including the compatibility of the two companies”, according to a statement.

In the statement, Chinh Chu, senior managing director of Blackstone, praised Stiefel’s management team, product portfolio and opportunities for international expansion.

Stiefel was founded in 1847 and manufactures and markets both prescription and over the counter dermatological products. It employs 2,000 people and had sales of $445 million for the fiscal year ended March 2007.

Deutsche Bank was Stiefel’s financial advisor, while Willkie Farr & Gallagher provided legal counsel. Merrill Lynch and Simpson Thacher & Bartlett advised Blackstone.

Blackstone bought Ohio-based Pharmaceutical Technologies and Services in January for $3.3 billion, and last year committed $50 million to Emcune, a Pune, India-based producer of raw materials used to make drugs. That deal was the New York firm’s first in India.

This week, the 22-year-old private equity firm set a world record for fundraising with the close of its fifth fund on $21.7 billion.