Altor Gets $370 Million for Swedish Pharmacies Leveraged Buyout

Altor Equity Partners AB raised 2.64 billion kroner ($370 million) to fund the private equity firm’s leveraged buyout of 208 pharmacies from the Swedish government.

Nordea Bank AB is the sole underwriter for 2.59 billion kroner of senior debt while Ares Management LLC, and Armada Mezzanine Capital provided 50 million kroner of so-called mezzanine debt, which ranks after senior obligations for repayment, Nordea said in a statement today.

Stockholm-based Altor said in November it will rebrand the pharmacy outlets under the Apotek Hjaertat name to create the country’s largest independent pharmacy chain. Sweden is privatizing the pharmacy market after it was nationalized in 1970.

The senior debt includes two term loans, a revolving credit and a capital expenditure facility, according to the statement.

The acquisition debt represents less than 3.5 times the outlets’ earnings before interest, tax, depreciation and amortization, Nordea said in the statement. Altor will pay about 40 percent of the acquisition price with its own funds, according to the statement.

In a leveraged buyout, a buyer funds its acquisition with money borrowed in the target company’s name. The financing is graded below Baa3 by Moody’s Investors Service and BBB- by Standard & Poor’s.

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