Medivir today announces that the company has entered into an agreement with Karo Pharma regarding the sale of Medivir’s subsidiary BioPhausia AB (Nordic Brands) to Karo Pharma.
Medivir AB (Nasdaq Stockholm: MVIR) today announces that the company has entered into an agreement with Karo Pharma AB regarding the sale of Medivir’s subsidiary BioPhausia AB (Nordic Brands) to Karo Pharma. The purchase price will be SEK 908 million on a cash and debt free basis, including a normalized working capital. The transaction is expected to close by mid-December 2016.
Background and rationale
As previously communicated through press releases in June and August
2016, the Board of Directors of Medivir tasked the management to
investigate a separation of the group’s operations into two independent
companies, with the aim to separately list the commercial operations. In
the meantime, the Nordic Brands portfolio (BioPhausia AB) has attracted
significant interest from several prospective buyers. In a structured
process of evaluating a sale versus a separate listing, the Board of
Directors of Medivir has concluded that a divestment of BioPhausia AB to
Karo Pharma is the best alternative for BioPhausia, Medivir and its
Nordic Brands in brief
BioPhausia consists of thirteen established pharmaceutical drugs with
strong brand names. For the period of Q3-2015 to Q2-2016, BioPhausia
generated revenues of SEK 189 million.
The transaction entails a divestment of 100 per cent of the shares in
Medivir’s wholly owned subsidiary BioPhausia AB for a purchase price of
SEK 908 million on a cash and debt free basis including normalized
working capital. Transaction costs are estimated to approximately SEK 25
million. The separation process and operational realignment as a
consequence of the sale will result in additional one off costs of
approximately SEK 15 million. The employees that today serve this
operation are not part of the transaction, and approximately 10
employees will therefore unfortunately have to leave Medivir after the
Closing of the transaction is subject to customary provisions. The
purchase price will be paid in cash only.
Financial impact for Medivir and its shareholders
Based on the purchase price of SEK 908 million, the transaction will
increase the net result for the consolidated Medivir and the parent
company Medivir AB with approx. SEK 530 million and approx. SEK 300
million respectively. Furthermore, the transaction will strengthen the
cash position, after setting aside an escrow amount during warranty
period of twelve months, with approx. SEK 780 million.
The Board of Director’s intention is to recommend, following a review of
the capital need, that excess proceeds as a result of the divestment
should, to the extent possible, be distributed to the shareholders, by
way of dividend or otherwise. The Board of Directors will present its
recommendations and proposals, which are subject to Medivir shareholder
approval, not later than in connection with the year-end report.
Niklas Prager, CEO of Medivir, commented: “I am convinced that this sale
of the Nordic Brands portfolio to Karo Pharma is the best way to
maximize the value for our shareholders. The commercial portfolio can
continue its positive development in an organization with a strong focus
on specialty pharmaceuticals, while Medivir can focus fully on its
transformation to an oncology focused and effective R&D company with an
exciting portfolio of projects in different stages of development.”
Medivir has engaged Carnegie Investment Bank as financial adviser and
Vinge as legal adviser in connection with the transaction.
This information is information that Medivir AB is obliged to make
public pursuant to the EU Market Abuse Regulation. The information was
submitted for publication, through the agency of the CFO set out above,
at 08.00 CET on 1 November, 2016.
Medivir is a research based pharmaceutical company with a research focus
on oncology and infectious diseases. We have a leading competence within
protease inhibitor design and nucleotide/nucleoside science and we are
dedicated to develop innovative pharmaceuticals that meet great unmet
medical need. Our commercial organization provides a portfolio of
specialty care pharmaceuticals on the Nordic market. Medivir is listed
on the Nasdaq Stockholm, Mid Cap.
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