The sale of 50% of Opella to CD&R by Sanofi in October 2024 was the largest buyout in Europe this year and also the opportunity for last minute intrigue and political drama of which only the French have the secret.

After several increases of the bid price, including an 11^th hour attempt by PAI to outbid CD&R by a meagre 200ME, who can say if the final price was fair?

With USD5.6bn of revenues¹, an implied enterprise value of USD17.39bn² and core EBITDA of USD1.24bn, the transaction EBITDA multiple is 14x according to Reuters³ and the EV-to-Sales ratio of the deal stands at 3.1x.

Is this cheap, fair or expensive?

While almost everyone will have an opinion, the standard approach to try and answer this question factually would be to look at recent comparable transactions. Good luck with that… There is no recent deal that can be directly compared to this one. Looking for transactions that took place in the same sector in the past 12 months in Pitchbook or Preqin yields less than 10 data points: this is not enough to compute even a simple average that is robust, let alone control for deal characteristics.

An alternative approach is to use privateMetrics®, a scientific, quantitative approach to building private market comparables based on a solid asset pricing model and the law of large numbers.

Here, we examined the systematic characteristics of the Opella deal in detail by first looking at the PECCS® peer group, as per the Private Company Classification Standard created by EDHEC, and comparables over the past 12 months in Europe (data from September 2024).

Next, we obtained more precise and robust comparables by integrating the business risk characteristics (or risk factors) that are used to calibrate the privateMetrics asset pricing model. For example, we can further slice and dice the privateMetrics data for European pharmaceutical production companies by controlling for company-level leverage, revenue growth and profits.

We conclude that Opella was sold at a price that is very close to the average market price for a company in this specific PECCS peer group with a similar risk factor profile.

This is reassuring for investors who did not overpay and for Sanofi who made a fair sale. It also suggests that all the drama around this transaction which has worried investors looking at making private equity deals in France is unlikely to have distorted the final price.

Read our full analysis here.

To find out more, please refer to the privateMetrics asset pricing model or request a demo.

¹Yahoo!finance.
²Wall Street Journal.
³Reuters.