Owners might sell Talecris instead of pursuing an IPO

The investment firms that own Talecris Biotherapeutics, one of the Triangle's most successful biotechnology companies, may be considering a sale of the business rather than risking a hostile reception on Wall Street.

The Financial Times reported that Cerberus Capital and partner Ampersand Ventures are looking to cash in their investments through a sale of Talecris, which makes drugs and other products from blood plasma. Selling Talecris would allow the firms to avoid attempting an initial public offering of stock proposed last summer.

IPOs have become increasingly difficult to pull off amid the recent stock market swoon.

"It's not exactly an investor-friendly stock market," said John Fitzgibbon, who runs IPOScoop.com, a research firm. Wall Street interest in IPOs has largely dried up, with about four deals a month this year, down from two dozen a month over the past 25 years, he added.

Citing unidentified sources, The Financial Times reported that CSL Ltd., an Australian blood-products company, is a potential buyer.

Talecris officials do not comment on rumors or speculation, spokeswoman Wendy Wilson said. If the company pushes ahead with its IPO plans, it will need to file updated financial and other information with the Securities and Exchange Commission.

Efforts to reach officials with Cerberus and Ampersand for comment were unsuccessful.

While a sale would further enrich Talecris' owners, it could create more uncertainty for the company's local work force. Talecris employs about 4,000 worldwide, including 2,100 at its Research Triangle Park headquarters and a manufacturing plant in Clayton.

A new owner, especially a rival in the same line of business, would want to make a purchase pay off. That often includes cutting costs by eliminating overlapping jobs.

Of course, that didn't happen when Cerberus and Ampersand bought Talecris, formerly the blood-plasma business of Bayer, in 2005 for $303.5 million. Under new management, Talecris continued to expand. Local workers received annual bonuses and profit-sharing retirement contributions, as well as more say in business decisions. And the possibility of becoming a publicly traded company was alluring.

Last July, Talecris filed plans to raise as much as $1 billion through an IPO. Not all employees would receive stock as compensation, but most publicly traded companies set up stock-purchase arrangements.

But much of the money raised in an IPO would go to repay debt. And that fact, despite Talecris' otherwise solid financial health, limits its appeal on Wall Street, Fitzgibbon said. "In a choppy and declining market, investors aren't too enthusiastic about paying off debt, paying fees to insiders."

Talecris reported revenue of $1.2 billion for 2007, up from $1.1 billion the year earlier.

Cerberus and Ampersand already have earned rich returns on Talecris. In December 2006, they completed a restructuring that extracted nearly $800 million in cash dividends from the company. Now Cerberus is looking to cash out successful investments as it struggles with others, including its purchase of General Motors' finance arm, the Financial Times reported.