Private Equity EQT Offers To Acquire Swedish Pharma Recipharm For $2.1B

Stockholm headquartered private equity group EQT AB will buy Swedish pharma company Recipharm AB for $2.1 billion, according to company's press release.

The transaction will be routed through Roar BidCo AB, a limited liability company established on Nov. 10, 2020, wholly-owned by EQT.

Why Does It Matter: The purchased consideration is fixed at 220 SEK per share in cash, a 23% premium on Recipharm closing price in the Stockholm Stock Exchange Friday. The convertible bondholders will be paid SEK 1,427 for every SEK 1,000 held as the principal amount.

Bloomberg cited Peter Sehested, an analyst from the Swedish consumer bank Svenska Handelsbanken AB saying that the offer price is lower compared to the other deals in the pharma industry. For the deal to follow through, 90% of shareholders are required to vote in favor.

Why Does It Matter: Post-acquisition, Roar Bidco will hold 25.7% ownership in Recipharm with 74.3% voting rights through Recipharm Board Chairman Lars Backsell and Recipharm CEO Thomas Eldered. Both members are participating with EQT.

The pharmaceutical industry is witnessing a wave of consolidation by way of mergers and acquisitions.

On Saturday, AstraZeneca PLC (NASDAQ: AZN) agreed to a $39 billion acquisition deal with Alexion Pharmaceuticals Inc (NASDAQ: ALXN) in a cash and stock deal.

Last week, Gilead Sciences Inc (NASDAQ: GILD) also announced a $1.4 billion agreement to buy German drugmaker MYR Pharmaceuticals.