Biovitrum To Buy Swedish Orphan

STOCKHOLM (Reuters) – Swedish biotechnology group Biovitrum (BVT.ST) said on Thursday it had signed a deal to buy drug firm Swedish Orphan, jointly owned by holding company Investor AB (INVEb.ST) and private equity firm Priveq. Biovitrum said in a statement it had agreed to pay an upfront consideration of 3.5 billion Swedish crowns ($493.2 million) on a cash and debt-free basis.

“The two companies fit like a hand in a glove,” it said. “In one giant leap we form a company with a leading position within rare diseases and a solid platform for future growth and profitability.”

Investor AB and private equity firm Priveq each own 42 percent of Swedish Orphan, which made an operating profit of 201 million crowns in the year to April, and sales of 694 million.

Biovitrum said it would finance the acquisition through a rights issue, an issue in kind as well as bank financing.

Proforma revenues of the combined group were seen at 2 billion crowns this year with an operating margin (EBITDA) of 15 percent, it added.

“The combination will allow the new group to realise annual operating cost synergies and cost avoidance in excess of 100 million crowns with full effect from 2011,” it said. ($1=7.097 Swedish crowns) (Editing by Greg Mahlich)