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3i completes $700m sale of Xellia Pharmaceuticals to Novo Group

21 May 2013

UK private equity firm 3i has completed its previously announced exit for Denmark’s Xellia Pharmaceuticals with its sale to Novo Group for $700m.

The sale will yield a return of 2.3 times on its original investment of $208m, the firm said. Proceeds to 3i from the transaction will be £143m, representing a 44 per cent uplift against a value of £99m at 31 March 2013.

As a consequence of the transaction, Xellia will revert to Danish ownership with headquarters in Copenhagen, Denmark.

Since its €258m spin-out from NYSE-listed Alpharma in 2008, Xellia’s management and international investor 3i have transformed the business from an active pharmaceutical ingredient manufacturer to a specialty pharmaceutical company focused on anti-infective products. The company generated revenues of $220m in 2012.

Novo’s investment will allow Xellia to enhance its focus on R&D and expand its global manufacturing footprint to further scale its finished-dosage-form business, it said.

Novo is a significant international life science investor, and the major shareholder of Novo Nordisk, Novozymes and Chr. Hansen Holding. These companies, which have similar technology and manufacturing approaches to Xellia, have experienced significant growth in recent years.

Carl-Åke Carlsson, CEO, Xellia said, “When the management team bought out Xellia in 2008, we had ambitious plans, which we were able to implement with 3i’s support, expertise and commitment. We have successfully transitioned the business in order to become a world leader in the supply of certain anti-infective products.

“Now, as we focus on the future and the further development of the business, including the launch of our novel antibiotics pipeline, we look forward to working with Novo and benefitting from their expertise in the life science sector.”

The deal comes on the back of a flurry of exits for 3i, while its recently announced 2012 results saw it “significantly outperform” its cost savings target.

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