Recipharm board backs takeover bid

The board of Swedish-based CDMO Recipharm has unanimously recommended that shareholders accept a revised offer for the firm from Roar BidCo, a vehicle set up by investment organisation EQT IX and backed by chairman Lars Backsell and CEO Thomas Eldered. The offer period ends on 12 February. Roar BidCo has said that it does not plan any changes to the management team or for employees.

The offer of SK 232/share, up from an initial bid of SK196 and another of SK220 on 14 December, was deemed fair by the board. It represents a premium of about 31.2% on the volume-weighted average trading price of SEK 176.87 on the last day of trading before the offer was announced and 79% up on the average for the previous 180 days.

Backsell and Eldered, who indirectly hold shares representing about 74.3% of all votes and 25.7% of the share capital in Recipharm will surrender these on completion. Various banks and pension funds representing 18.4% of the shares have also said that they will accept, bringing the total above the 90% threshold required. Regulatory approval will also be needed.

The Recipharm board said that it considered a number of factors in evaluating the offer, including the current strategic and financial position, prevailing market conditions, operational opportunities and challenges, and the company’s expected future development. It allowed Roar BidCo to conduct due diligence. Backsell and Eldered stood aside during this process because of their stake in the bid.

Recipharm was first listed on Nasdaq Stockholm in 2014. Since then net sales have grown from SK2.1 billion in 2013 to S11.1 billion in 2020, while EBITDA grew from SK283 million to just over SK2 billion. In early 2020, it acquired Consort Medical, Aesica’s owner, in a SK6.3 billion deal.

The company has since signed major COVID-19-related deals with Arcturus Therapeutics and Moderna, and invested to ensure supply to both. The latter’s therapy is now approved in the EU and the US and Recipharm now has additional orders worth about SK350 million for 2021. These deals, the company said, in part explained the increased offer since Roar BidCo first emerged.