EQT offers to buy Recipharm of Sweden in US$2.1b deal

[STOCKHOLM] Private equity firm EQT has offered to take over Swedish pharmaceuticals company Recipharm for US$2.1 billion, marking the latest in a string of deals underpinning demand for health-care targets.

EQT is offering shareholders 220 kronor (S$34.8) in cash per share, compared with Friday's closing price of 179 kronor. It's also proposing to give holders of Recipharm's senior unsecured convertible bonds 1.43 billion kronor in cash per 1 million kronor in aggregate principal of the convertible bonds, according to a statement on Monday.

The bid comes just two days after AstraZeneca agreed to buy Alexion Pharmaceuticals for US$39 billion in cash and shares. Other deals announced recently include Gilead Sciences' US$1.4 billion purchase of German hepatitis drug maker MYR GmbH and Boehringer Ingelheim's 1.2 billion-euro acquisition of NBE-Therapeutics.

EQT's bid also follows news from Recipharm that a molecule it's developing, Erdosteine, appeared to help Covid patients recover after they were discharged from hospital. The company, whose biggest shareholder is the Swedish state with a roughly 16 per cent stake, has seen its share price gain about 36 per cent this year.

Stockholm-based EQT has already secured ownership of about 25.7 per cent of the shares and 74.3 per cent of the votes in Recipharm through its chairman, Lars Backsell, and Thomas Eldered, its chief executive. The deal is worth 17.9 billion kronor, or about US$2.1 billion.

Recipharm specialises in the contract development and manufacture of pharmaceuticals. EQT's offer is conditional on getting acceptance from shareholders representing more than 90 per cent of the stock.

The private equity giant, which has seen its market value grow more than 180 per cent since a September 2019 initial public offering, said taking Recipharm private would address the company's needs, amid "continued consolidation in the sector." With the deal, EQT said its EQT IX fund is expected to be 25 per cent to 30 per cent invested.

The offer is fully financed by a combination of funds available to Roar BidCo, the vehicle through which EQT is making the bid, by way of an equity commitment letter issued by EQT IX.

BLOOMBERG