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Bayer HealthCare Buys Schiff Nutrition, TPG Growth-Backed Maker of Airborne

Under CEO Marijn Dekkers, Bayer AG has been increasingly acquisitive

Bayer HealthCare LLC, a subsidiary of Germany’s Bayer AG, has agreed to purchase Schiff Nutrition International, Inc. (NYSE: SHF), a private equity-backed U.S. producer of non-subscription vitamins and nutritional supplements, including cardiovascular treatment MegaRed, joint-care treatment Move Free and immune support treatment Airborne, in a deal valued at $1.2 billion.

Bayer HealthCare, based in Leverkusen, Germany, is paying $34 per share in cash to shareholders of Salt Lake City, Utah-based Schiff, which represents a 47 percent premium over Friday's closing price of $23.19.

 The transaction is designed to generate Bayer HealthCare’s growth in non-subscription drugs and in the U.S.

 "Bayer is committed to augment its organic growth with strategic bolt-on acquisitions,” says Dr. Marijn Dekkers, who became chief executive of Bayer AG in 2010. "The Schiff business significantly enhances our presence and position in the United States, which accounts for more over-the-counter and nutritional products sales than any other country in the world."

Bayer AG has become increasingly acquisitive under Dekkers’ stewardship. In September, Bayer HealthCare agreed to acquire Teva Pharmaceutical Industries Ltd.’s (NYSE: TEVA) animal health business for $145 million. And in July, Bayer CropScience AG, agreed to buy AgraQuest Inc., a developer of fungi-killing bacteria to fight plant disease, for $425 million and an undisclosed amount in profit-related payments.

Private equity firm TPG Growth bought roughly 25 percent of Schiff Nutrition in 2010 and helped the supplement developer make bolt-on acquisitions, including, most significantly, Airborne Inc. for $150 million in cash in March of 2012. Previously, Schiff Nutrition bought probiotic brands, intellectual property and technology from Ganeden Biotech in 2011.

Bayer HealthCare's consumer division is headquartered in Morristown, N.J. and markets such well-known brands as Bayer Aspirin, Aleve, Alka-Seltzer, Bactine, Phillips' Milk of Magnesia, Midol and One-A-Day vitamins.

The deal is expected to close by year end but is subject to customary closing conditions.


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