(Bloomberg) -- Private equity firm EQT AB has offered to take over Swedish pharmaceuticals company Recipharm AB for $2.1 billion, marking the latest in a string of deals underpinning demand for health-care targets.
EQT is offering shareholders 220 kronor in cash per share, compared to 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 ($170 million) 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 Plc agreed to buy Alexion Pharmaceuticals Inc. for $39 billion in cash and shares. Other deals announced recently include Gilead Sciences Inc.’s $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% stake, has seen its share price gain about 36% this year.
Stockholm-based EQT has already secured ownership of about 25.7% of the shares and 74.3% 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 $2.1 billion.
Recipharm specializes in the contract development and manufacture of pharmaceuticals. EQT’s offer is conditional on getting acceptance from shareholders representing more than 90% of the stock.
The private equity giant, which has seen its market value grow more than 180% 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% to 30% 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.
Debt financing will be via Goldman Sachs International, GS Mezzanine Partners, Broad Street Danish Credit Partners and GLQC Sarl.
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(Adds background on Recipharm treatment, details on financing, reference to AstraZeneca deal)
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