In December 2020, EQT IX, through Roar BidCo AB, announced a public offer of SEK 220 in cash per share to the shareholders of Recipharm AB and SEK 1,427,010 in cash per Convertible Bond.
The class B shares in Recipharm are listed on Nasdaq Stockholm, Mid Cap. The Convertible Bonds are admitted to trading on the Frankfurt Stock Exchange, Open Market (Freiverkehr). Roar BidCo has secured ownership of approximately 25.7 per cent of the shares and 74.3 per cent of the votes in Recipharm through Lars Backsell, the chairman of the board of Recipharm, and Thomas Eldered, the CEO and a member of the board of Recipharm, who are indirect shareholders of Recipharm and are participating with EQT IX in the Offer. They have undertaken to contribute all of their shares in Recipharm to Roar BidCo in connection with completion of the Offer, entailing that Roar BidCo controls 21,312,000 shares of class A and 4,629,410 shares of class B, corresponding to 25.7 per cent of all outstanding shares and 74.3 per cent of the votes in Recipharm.
“We are convinced they are best placed to provide the necessary support and to lead Recipharm during the next phase in developing the company. We will not accept any competing offers and will not participate in any other consortium; we want to do this together with EQT.”
“In EQT we have found a partner who shares our values as entrepreneurs and our vision for Recipharm. EQT has also an impressive track record of sustainable value creation and growth. We are convinced that EQT’s experience in developing companies will allow us to build an even stronger company faster in an industry in rapid change. We have chosen our partner carefully and are now committed to EQT. We are convinced they are best placed to provide the necessary support and to lead Recipharm during the next phase in developing the company. We will not accept any competing offers and will not participate in any other consortium; we want to do this together with EQT,” Lars Backsell, the chairman of the board of directors of Recipharm, and Thomas Eldered, member of the board of directors and the CEO of Recipharm.
Read more: Brick by brick – The Recipharm journey
Approximately SEK 17,929 million
The total value of the Offer, based on the 75,009,0136 shares in Recipharm not directly or indirectly held by Roar BidCo or its closely related parties, and all outstanding Convertible Bonds, amounts to approximately SEK 17,929 million.
The acceptance period for the Offer is expected to commence on or about 18 December 2020 and expire on or about 12 February 2021. The Offer is conditional upon the Offer being accepted to such extent that Roar BidCo becomes the owner of shares representing more than 90 per cent of the total number of outstanding shares in Recipharm (on a fully diluted basis). Further, the Offer will be made on the terms and subject to the conditions 2 – 8 set out below in this announcement.
“Recipharm has generated strong growth over the past years through a number of acquisitions, and today holds a strong position in the global CDMO market. EQT wants to support Recipharm’s continued development, which will require significant and long-term investments. We value Recipharm’s management team and employees highly, and look forward to partnering with Lars Backsell and Thomas Eldered. We share many of the founders’ values, including the importance of an entrepreneurial approach and a clear sustainability focus. As a very active investor in the global healthcare sector, EQT is well positioned to support Recipharm to futureproof its operations and accelerate its growth. We are convinced that we can add significant value, both in terms of expertise and capital,” says Erika Henriksson, Partner at EQT Partners and Investment Advisor to EQT IX.
“The acceptance period for the Offer is expected to commence on or about 18 December 2020 and expire on or about 12 February 2021.”
“We have had a dialogue for some time regarding a possible offer from EQT, Backsell and Eldered. The board will now thoroughly evaluate the offer and present its opinion to the shareholders in due course,” says Anders G. Carlberg, chairman of the independent board of Recipharm.
Recipharm intends to publish its January-December 2020 financial report, or preliminary financial data for January-December 2020, before the end of the acceptance period for the Offer. Recipharm will update its financial calendar once a new date for the report has been set.
Error in Terms of the Convertible Bonds
In 2016, Recipharm issued convertible bonds, listed on the Frankfurt Stock Exchange, Open Market. Due to an administrative mistake when the convertible bonds were issued, the final convertible bond terms and conditions contain an error, states the company. The effect of the error is that the formula to be used to calculate the conversion price adjustment in the event of a “change of control event” (or a “free float event”) does not correctly reflect the formula presented to investors when the convertible bonds were issued or the commercial intention when the convertible bonds were issued.
Recipharm intends to correct the error following the procedures included in the terms and conditions of the convertible bonds, which may entail a process involving the trustee administering the convertible bonds or approval from the bondholders. Recipharm expects the process of correcting the formula to be finalized in advance of the expiry of the acceptance period for the Offer. Completion of the Offer is conditional, among other things, on the correction being made.