Private Equity News & Analysis

Firms gets boost from $860m Swedish pharma sell-off

Three Nordic private equity firms have acquired chains of pharmacies from the Swedish government. KKR’s Alliance Boots, which reportedly bid for assets, was not among the auction winners.

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Three local private equity firms have acquired groups of retail pharmacies as part of a SEK 5.9 billion (€573 million; $859 million) privatisation of the Swedish pharmaceutical sector.

Altor Equity Partners, the Nordic private equity firm with €3.8 billion under management, has taken the largest of the private equity-backed stakes. Through the newly formed company Apotek Hjärtat, it has acquired two “clusters” of pharmacies, amounting to 208 outlets with a turnover of SEK 7.1 billion.

Swedish private equity firm Segulah has acquired three pharmacy “clusters”, comprising 62 outlets with a combined turnover of SEK 3.1 billion. It will operate under the brand Medstop.

Priveq Investment, another Swedish private equity firm, has partnered with listed investment group Investor to acquire 24 pharmacies with a combined turnover of SEK 1.4 billion.

Swedish pharmacies: Open for business
A fourth group of 24 pharmacies was acquired in a joint venture between Nordic pharmaceutical group Oriola-KD and Swedish business co-operative KF.

The sales represent the culmination of a restructuring of Apoteket, the Swedish government-owned pharmacy monopoly. The aim of the exercise is to increase customer access to pharmaceuticals through longer and more flexible opening hours and the establishment of more outlets.

“Sweden has one of the lowest numbers of pharmacies per capita in Europe, so there will obviously be a number of new operators looking to open up new pharmacies … ourselves included,” said Percy Calissendorff, a partner at Segulah, in a telephone interview.

Around half of the 900 or so pharmacies in the country will remain under state ownership, according to Apoteket Omstrukturering, the agency in charge of the restructuring process.

Alliance Boots, the European pharmaceutical giant owned by Kohlberg Kravis Roberts, was reportedly among those to bid for parts of the Swedish pharmaceutical monopoly. According to a report in this morning’s Financial Times the group had bid for one of the two largest clusters. A spokeswoman for KKR declined to comment on the process.