Cerberus Reportedly Shopping Talecris Biotherapeutics to Competitors

Implications: After abandoning a 2007 IPO, Talecris majority owner Cerberus Capital is now reported to be pursuing negotiations to sell the $1.2 billion plasma products firm. Talecris' valuation will necessarily involve projections of worldwide market demand for intravenous immunoglobulin (IVIg), the industry's most important product.

Analysis:

Talecris manufactures IVIg, human albumin, alpha-1 proteinase inhibitor and factor VIII.  Together with Baxter Healthcare and the Australian conglomerate CSL, Talecris is one the three leading U.S. suppliers of plasma products.  Year-over-year sales grew nearly 10% in 2007, with a robust $265 million in EBITDA.

Cerberus may be looking at an outright sale of the company to add to its return on investment and generate needed cash.  According to a report in the Financial Times, it may be in discussions with CSL, a logical suitor to manage this kind of complex and highly regulated operation.  CSL successfully acquired and integrated Aventis Behring in 2004.

Talecris is currently working its way through a significant production hiccup, but this issue is readily resolvable.  Future revenues and profitability will have much to do with the future direction of pricing and demand in the all-important U.S. and international IVIg market.