Bloomberg News

Nobel Biocare Soars on Report of EQT, Bain Buyout Interest

October 24, 2011

(Updates with stock price in second paragraph.)

Oct. 24 (Bloomberg) -- Nobel Biocare Holding AG rose the most in almost 12 years in Zurich trading after NZZ am Sonntag reported that EQT Partners AB and Bain Capital LLC are considering buying the Swiss dental-implant maker.

Nobel Biocare gained 18 percent to 11.76 Swiss francs at 4:40 p.m., valuing the company at 1.46 billion francs ($1.65 billion). The stock climbed as much as 21 percent, the biggest intraday increase since Jan. 27, 2000. The stock, which gained 9.4 percent Oct. 21 on takeover speculation, has fallen 87 percent since reaching a record in April 2007.

The price drop and the sale of a competitor at a higher valuation this year has sparked interest in the company, Oliver Metzger, an analyst with Commerzbank AG, said in an interview today. He raised his recommendation on the stock on Oct. 17 to “buy” from “hold,” saying the price drop was “overly pessimistic.”

“I see the recent movements as valuation-driven,” Metzger said. “People think the shares are cheap.”

EQT, a Stockholm-based private equity company, has been looking at Nobel Biocare as a takeover target “for some time,” NZZ am Sonntag reported yesterday, citing two unidentified people. Bain, a Boston-based buyout fund manager, has been trying to decide for “several months” whether Nobel Biocare is a “buy” or whether the shares will fall further, according to the Swiss newspaper.

No Approach

Nobel Biocare hasn’t been approached by a potential buyer and isn’t in talks with anyone, Nicolas Weidmann, a spokesman for the Glattbrugg-based manufacturer, said in a telephone interview today.

A spokesman for EQT declined to comment. A spokeswoman for Bain in London said she couldn’t immediately comment.

Nobel Biocare was the world’s largest dental-implant maker based on sales before losing ground to Straumann Holding AG in 2010. The company has a new chief executive and is attempting to regain market share with new products. It’s scheduled to release third-quarter figures on Nov. 8.

The company’s price-to-earnings ratio based on 2012 estimated earnings shrank from 22.8 on July 1 to 13.9 as of Oct. 17, according to Metzger.

“If you focus only on the valuation side, Nobel is a cheap target,” Metzger said. “From a fundamental standpoint, I haven’t seen many improvements so it needs some time.”

As of mid-October, Nobel was cheaper than Astra Tech, a Swedish manufacturer of dental implants and medical devices that Dentsply International Inc. said on June 22 it plans to buy for $1.8 billion in cash. Dentsply is paying a multiple of 3.4 times sales for Astra Tech including net debt, while Nobel Biocare sells for 1.5 times estimated 2012 sales, Metzger said in his Oct. 17 note.

Even if Nobel Biocare trades at 13 francs a share it would still be cheap, Metzger said today.

--With assistance from Dermot Doherty in Geneva; Anne-Sylvaine Chassany in Paris and Adam Ewing in Stockholm. Editors: Phil Serafino, Robert Valpuesta

To contact the reporter on this story: Allison Connolly in Frankfurt at aconnolly4@bloomberg.net.

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net.


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