EQT AB is acquiring LSP, a European life sciences venture capital firm, to strengthen its position as one of the leading and most active private markets investors in the healthcare sector. The upfront consideration amounts to EUR 450 million ($520 million) on a cash- and debt free basis, comprising of 25 percent cash and 75 percent new EQT AB publicly traded shares, with a potential additional earn-out payment of EUR 25 million. Moelis advised LSP on the transaction.
EQT strengthens position in healthcare investments by joining forces with LSP
EQT AB (publ) today announces the signing of an agreement (the “Transaction”) to acquire LSP (“Life Sciences Partners” or the “Company”), a leading European life sciences venture capital firm with approximately EUR 2.2 billion of assets under management (AUM) and a team of 34 professionals.
- LSP will strengthen EQT’s position as one of the leading and most active private markets investors in the healthcare sector
- LSP’s highly experienced team will complement EQT’s existing knowledge base within life sciences and expand EQT’s ability to support companies at the forefront of innovation in the healthcare sector
- LSP will enhance EQT’s ability to drive positive social impact in the healthcare industry and future-proof companies that can advance life science research through cutting edge technology
- The upfront consideration amounts to EUR 450 million (on a cash- and debt free basis), comprising of 25 percent cash and 75 percent new EQT AB publicly traded shares, with a potential additional earn-out payment of EUR 25 million
LSP, headquartered in Amsterdam, the Netherlands, is a venture capital firm that invests in innovative companies with strong scientific and clinical rationale across several life sciences strategies. The Company was founded in 1998 and today is one of Europe’s largest and most experienced life sciences investment firms. LSP employs 34 professionals across its offices in Amsterdam, Munich, and Boston.
Over the past two decades, LSP has invested in over 150 life sciences companies, generated strong returns, and built a top-performing life sciences franchise. As part of EQT, the LSP team will be able to continue to operate in the same successful manner as they have been operating over the past two decades. The entire LSP team, including all partners and employees, will join EQT.
LSP is expected to generate approximately EUR 37 million in revenues and approximately EUR 24 million in EBITDA (excluding carried interest) during 2021. The proposed consideration is expected to equate to a mid-teens EBITDA multiple on a run-rate basis at completion.
- Strong scalability benefits for both parties. LSP brings a deep scientific knowledge base, which will enable thorough assessment of scientific risk and development of science-based companies. As part of EQT, LSP can continue to grow its business while leveraging the full EQT platform, including fundraising support, in-house digitalization, and sustainability capabilities. LSP’s broad life sciences network is a great asset and is complementary to EQT’s global healthcare advisory network
- Access to new types of investment opportunities and a broadened investable universe for both parties. By joining forces, LSP and EQT will broaden the potential scope of deals for both parties, with the opportunity to future-proof more healthcare companies and make an even greater impact on society
- Strong cultural fit and aligned investment philosophy. LSP and EQT share a thematic approach to investments and value creation, with a values-based corporate culture
Per Franzén, Partner and Head of EQT Private Capital, said, “EQT has a long history of developing strong healthcare companies, and today we are one of the largest and most active private equity investors in the sector globally. Integrating LSP within EQT’s Private Capital platform will bring compelling cross-pollination opportunities for our other strategies and complement our sector expertise – making EQT an even better and more innovative healthcare investor.”
René Kuijten, Managing Partner at LSP, and incoming Partner and Head of EQT Life Sciences, said, “’Europe has many attractive life sciences companies. Together with EQT, one of the largest European private equity firms with more than EUR 70 billion under management, LSP can select, develop, and finance these opportunities even better than before. Given the strong cultural fit and the complementarity between our organisations, we are convinced that joining forces is a win-win for our investors, our portfolio companies, our LSP colleagues, and the broader European life sciences ecosystem.”
Martijn Kleijwegt, Founder and Managing Partner at LSP, added, “The partnership with EQT not only accelerates LSP’s growth opportunities in an unprecedented way but also guarantees the long-term continuity of LSP’s active role in the life sciences industry in Europe and beyond. Having started the firm in 1998, I feel proud to have built the firm with all the partners and other colleagues, and I feel very good about where it has landed today.”
Michael Bauer, Partner and Co-Head of EQT’s Global Healthcare sector team, said, “We are truly excited about the opportunity to join forces with LSP and form EQT Life Sciences. The EQT and LSP teams have complementary skill sets, and the combination will allow us to support healthcare companies and their management teams in a unique way. The life science industry is going through a phase of unprecedented innovation and, through the partnership with LSP, EQT will be able to participate in this growth opportunity and open up doors for attractive new investments in the space.”
Key transaction details
- EQT AB to acquire 100 percent of the LSP management company and 20 percent of the right to carried interest in select LSP funds. In addition, EQT AB will be entitled to 35 percent of the carried interest of future funds, which is in line with existing EQT policies
- Upfront consideration amounts to EUR 450 million (on a cash- and debt free basis) comprising of 25 percent cash and 75 percent EQT AB publicly traded shares (through issue of EQT AB ordinary shares, with the number of shares to be issued determined by the 10 day VWAP of EQT AB ordinary shares as of signing (equal to approximately 7.2 million shares, corresponding to a dilution of approximately 1 percent). In addition, a potential earn-out payment of EUR 25 million will be made if certain short-term fundraising targets are met
- Share consideration for LSP’s owners will be subject to customary lock-up provisions which will expire following the fourth anniversary of the completion of the Transaction (or, if earlier, by the end of Q1 2026)
- The issuance of new EQT AB ordinary shares is based on the authorization granted by the annual general meeting held in 2021
- The transaction is subject to customary closing conditions, including antitrust, regulatory and certain fund investor clearances
- The Transaction is expected to be accretive to EQT AB’s earnings in 2022
EQT Press Office, email@example.com, +46 8 506 55 334
EQT is a purpose-driven global investment organization focused on active ownership strategies. With a Nordic heritage and a global mindset, EQT has a track record of almost three decades of delivering consistent and attractive returns across multiple geographies, sectors and strategies. Uniquely, EQT is the only large private markets firm in the world with investment strategies covering all phases of a business’ development, from start-up to maturity. EQT today has more than EUR 70 billion in assets under management across 27 active funds within two business segments – Private Capital and Real Assets.
With its roots in the Wallenberg family’s entrepreneurial mindset and philosophy of long-term ownership, EQT is guided by a set of strong values and a distinct corporate culture. EQT manages and advises funds and vehicles that invest across the world with the mission to future-proof companies, generate attractive returns and make a positive impact with everything EQT does.
The EQT AB Group comprises EQT AB (publ) and its direct and indirect subsidiaries, which include general partners and fund managers of EQT funds as well as entities advising EQT funds. EQT has offices in 24 countries across Europe, Asia-Pacific and the Americas and has more than 1,100 employees.
More info: www.eqtgroup.com
LSP is one of the largest European investment firms providing financing for life sciences and health care companies. LSP’s management has raised over €3.0 billion ($3.5 billion) and supported the growth of more than 150 companies since it started to invest over 30 years ago, including signature deals such as argenx, Crucell and Neuravi. With offices in Amsterdam, Munich and Boston, LSP currently has the possibility to invest through several strategies, each having a distinctive investment scope and a dedicated team: LSP 7 invests in private early- to late-stage drug development and medical technology companies; the LSP Health Economics Fund (LSP HEF 2) focuses on private late-stage medical technology companies that can reduce the cost of healthcare; the LSP Dementia Fund invests in companies targeting neurodegenerative diseases; and LSP Public targets public healthcare companies. LSP is an active contributor to the global life sciences industry and the European life science eco-system by assuming roles as initiators, founders and board members in various private and public bodies and organizations, for example being founder and board member of the Oncode Institute.
More info: www.lspvc.com
Follow LSP on LinkedIn