Bavarian Nordic Agrees to $3 Billion Take-Private Deal with Nordic Capital and Permira

Bavarian Nordic, the Danish vaccine maker known for its mpox and smallpox vaccines, has agreed to a take-private offer from private equity firms Nordic Capital and Permira. The deal, valued at approximately $3 billion, marks a significant development in the pharmaceutical industry and underscores the growing interest of private equity in the healthcare sector.

Deal Details and Shareholder Implications

The proposed acquisition offers shareholders 233 Danish kroner per share, representing a 21% premium over Bavarian Nordic's closing price on Wednesday, the day before the company confirmed it was in takeover talks. The board of directors plans to unanimously recommend the deal to shareholders when they formally receive the bid in the coming weeks.

Bavarian Nordic's CEO, Luc Debruyne, stated, "The offer received from Nordic Capital and Permira is the result of intense negotiations aimed at securing the best possible terms for our shareholders." He added that the partnership with the private equity firms would accelerate Bavarian Nordic's growth strategy.

To complete the transaction, Nordic Capital and Permira will need to secure over 90% of the voting rights and share capital of Bavarian Nordic. The companies expect to finalize the deal in the fourth quarter of this year.

Bavarian Nordic's Product Portfolio and Recent Developments

Bavarian Nordic has gained prominence in recent years, particularly during the global mpox outbreak. The company's vaccine portfolio includes shots against mpox, smallpox, and the chikungunya virus. Their chikungunya vaccine, Vimkunya, received approvals in the EU, UK, and US, with the US launch occurring in March of this year.

The company's growth trajectory has been bolstered by increasing demand for its traveler vaccines and continued support for its government contract business. Recently, the US government exercised options for additional supply of Bavarian Nordic's smallpox vaccine, which is expected to increase revenue this year and secure business for the next.

Despite these successes, Bavarian Nordic has faced challenges, including the discontinuation of its respiratory syncytial virus vaccine program in 2023 due to negative late-stage trial results.

Future Outlook Under Private Ownership

Nordic Capital and Permira have indicated their intention to continue operating Bavarian Nordic "in the same manner" as it currently operates, including maintaining the company's main facilities. This commitment suggests that the private equity firms see value in Bavarian Nordic's existing operations and strategy.

The take-private deal is expected to provide Bavarian Nordic with additional resources and flexibility to pursue its growth objectives outside the scrutiny of public markets. As the pharmaceutical industry continues to evolve, this transaction may signal a trend towards increased private equity involvement in the sector, potentially reshaping the landscape for vaccine development and distribution.