Investor AB to Combine Associates Swedish Orphan and Biovitrum

Investor AB (INVEA), the Wallenberg family’s listed holding company, said its associate companies Biovitrum AB and Swedish Orphan International AB will merge to create a drugmaker with sales of 2 billion kronor ($283 million).

Investor will hold about 41 percent of the shares in Swedish Orphan Biovitrum if the transaction is completed, and has been granted an exemption from Sweden’s mandatory bid rules, it said in a statement. Investor now owns 42 percent of Swedish Orphan and 23 percent of Biovitrum.

Stockholm-based Biovitrum will use a combination of newly issued shares and cash to buy Swedish Orphan in a bid that values the specialty pharmaceuticals company at 3.5 billion kronor, Biovitrum said today in a statement.

The two drugmakers focus on niche products that treat rare diseases such as hemophilia and hereditary tyrosinemia type 1, a metabolic disease that causes liver failure in children.

“The two companies fit like a hand in a glove,” Biovitrum Chief Executive Officer Martin Nicklasson said in the statement. “We form a company with a leading position within rare diseases and a solid platform for future growth and profitability.”

Biovitrum shares rose 8.6 percent at 1:15 p.m. in Stockholm, or 5 kronor, to 63 kronor.

Nicklasson will head the combined company, which is expected to have sales of about 2 billion kronor this year, the companies said. Earnings before interest, taxes, depreciation and amortization are expected to reach 15 percent of sales. Swedish Orphan Biovitrum targets sales of more than 5 billion kronor in 2015 and an EBIT margin of more than 30 percent, according to Biovitrum.

To contact the reporter on this story: Janina Pfalzer in Stockholm at jpfalzer@bloomberg.net.

To contact the editor responsible for this story: Hellmuth Tromm at htromm@bloomberg.net.

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