Nordic reaps huge return on sale to rival

Buyout firm Nordic Capital has sold one of the ‘jewels’ of its portfolio to regional rival EQT, generating a substantial return in the process.

Nordic Capital has sold Swedish medical device manufacturer Atos Medical – described by a source at the firm as “one of our most interesting portfolio companies and one that's performed extraordinarily well” – to peer EQT in a deal which an investor source said had delivered a 5x return for the firm.

Both Nordic and EQT declined to comment on the purchase price for Atos, although a source with knowledge of the deal said EQT had paid about €300 million for the business.

EQT said it funded the acquisition using capital from EQT VI, with senior debt financing provided by Danske Bank, DnB NOR and Nordea, and mezzanine facilities provided by MezzVest and Partners Group. Atos’ management team has re-invested in the business as part of the secondary buyout.

Investment bank Moelis & Company ran the sale process for Nordic Capital as an auction, with an initial public offering of the business considered as a fall-back option according to a source close to the situation. The exit follows the firm's sale of pharmaceutical company Nycomed to Japanese corporate Takeda Pharmaceutical Company for €9.6 billion in May.

Nordic Capital acquired Atos for $110 million in 2005 from medical and scientific device company Fisher Scientific International, via Nordic Capital Fund V.

Last year, Atos’ revenues increased to €64 million. Nordic said the company under its ownership had delivered double digit growth ever year, with sales rising by 16 percent annually in that time. It has also become the undisputed market leader in its core segment – the provision of voice prosthesis products used when patients undergo serious throat surgery – and now has more than 70 percent market share, according to Nordic Capital.

In separate news, Nordic Capital withdrew from the bidding for Swedish cable television company Com Hem last week, leaving its bidding partner Cinven to continue in the auction process alone. Cinven and buyout rival BC Partners are the only private equity firms left in the hotly-contested auction, after CVC Capital Partners withdrew earlier in the process according to press reports. The sellers, private equity firms Providence Equity Partners and The Carlyle Group, are understood to be eyeing a price in excess of SKr 13 billion ($2 billion) for the business. Deutsche Bank and Morgan Stanley are running the sale process.