Nordic Capital Buys Stake in $3.6 Billion Drugmaker Leo Pharma

Nordic Capital, one of Europe’s most active private equity firms this year, agreed to invest 450 million euros ($535 million) in Danish dermatology firm LEO Pharma A/S.

The investment firm is buying a minority stake in LEO Pharma, according to a statement Tuesday, which didn’t disclose financial terms. The deal values LEO Pharma at about 3 billion euros including debt, people familiar with the matter said, asking not to be identified discussion confidential information.

LEO Pharma, a maker of topical medication for skin conditions, has been looking for a new investor since last year with the help of its advisers at Moelis & Co. The LEO Foundation will remain the majority shareholder of the company, according to the statement. A representative for Nordic Capital declined to comment on the valuation of the deal.

The transaction adds to a string of private equity deals in the industry. KKR & Co. recently bought a stake in Danish biotechnology group Nordic Bioscience A/S, while CVC Capital Partners entered exclusive talks this month to acquire French pharmaceutical firm Cooper. Health-care deals account for 14.4% of this year’s mergers and acquisition volume globally, up from 6.1% in 2007, according to data compiled by Bloomberg.

Drug Pipeline

“LEO is a focused dermatology company in a therapeutic area that we feel is very attractive and one where they have an innovative pipeline,” said Nordic Capital partner Raj Shah, a former heart surgeon who leads the firm’s health-care investments.

The company is developing treatments for skin disorders, which are becoming increasingly prevalent as the world’s population ages and levels of allergic disease rise. LEO Pharma employs 6,000 workers serving 93 million patients, according to the statement. It generated about 10.8 billion Danish krone ($1.7 billion) of revenue in 2019, its annual report shows.

Last year, Nordic Capital raised 6.1 billion euros for its biggest-ever fund. The firm has invested more than 7 billion euros in 29 health-care companies across Europe and North America since it was founded, according to the statement.

The investment is subjected to regulatory approvals and is expected to be completed in the first half of the year. Bank of America Corp. advised Nordic Capital on the transaction.

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