Swedish Drug Maker Recipharm Looks to List or Sell Stake

Sweden's Recipharm has hired UBS to advise on either a partial sale of the pharmaceutical company or a listing on the Stockholm exchange, a source close to the process told Reuters on Thursday.

The source said a part-sale or a listing were equally likely. If a listing were the preferred outcome, it would happen in the second half of 2013.

Recipharm, which is a contract manufacturer and developer of drugs for the pharmaceutical industry, has around 1,500 employees and made earnings before interest, tax, depreciation and amortisation (EBITDA) of 281 million Swedish crowns ($42.32 million) in 2012 on sales of 2.07 billion crowns. Its core profit margin was 13.5%, up from 9.6% in 2011.

German drug firm Aenova, whose business is similar to Recipharm's, was bought by private equity firm BC Partners from Bridgepoint last year at between 10 and 11 times EBITDA, a person familiar with that transaction said.

Applying that multiple to Recipharm would give it an enterprise value of 2.8 to 3.1 billion Swedish crowns.

Recipharm had net debt of 420 million crowns at the end of 2012.

Recipharm was founded in 1995 by Lars Backsell, currently chairman of the board, and Thomas Eldered, who serves as its chief executive. They jointly own 100% of Recipharm's shares.

Recipharm and UBS both declined to comment.