Orion to sell its Orion Diagnostica division
Orion Corporation (“Orion”) had announced last January that it was evaluating strategic alternatives of the Group’s Orion Diagnostica business division and had decided to investigate the possible sale of Orion Diagnostica as one alternative. Orion has now signed an agreement on the sale of all shares in Orion Diagnostica Oy (i.e. the Orion Diagnostica business division) to an investment fund managed by Axcel Management A/S, a leading Nordic private equity investment company (“Axcel”). The closing of the transaction is expected to take place during the second quarter of 2018. The closing is not conditional upon the parties obtaining approvals from competition law or other authorities or fulfilment of other preconditions.
The fixed purchase price is approximately EUR 163 million. In addition, Orion has a possibility to receive a variable component of EUR 60 million maximum. The payment of this variable component is based on return on investment for Axcel at the time of their exit. Orion estimates a capital gain of about EUR 128 million in other operating income for 2018. Due to the uncertainty relating to the variable component, the estimated capital gain does not include any part of the variable component.
“Orion Diagnostica has operated as an independent business and it has no material business synergies with Orion’s other operations. The sale of the division will allow us to further focus on growth and achieving our financial goals. Orion is currently working on numerous projects that target growth in our core area of the pharmaceuticals business. For example, we are actively evaluating late stage in-licensing opportunities. We also continue to invest in our own research and development activities, with new clinical trials, for example. The capital gain from the transaction will strengthen our equity position and maintain our ability to achieve our dividend distribution objective”, says Timo Lappalainen, President and CEO of Orion.
“Together with Orion Diagnostica’s management and employees, we intend to further develop the company into an even stronger operator in the global diagnostics market. On the back of an attractive customer proposition and a strong market position, we see great opportunity to grow Orion Diagnostica further both geographically and by expanding its product offering”, says Thomas Blomqvist, Partner at Axcel.