
EQT acquires LSP, forming EQT Life Sciences
EQT is to acquire life sciences-focused venture capital firm Life Sciences Partners (LSP); the LSP team and its funds are to form a new EQT Life Sciences arm.
The deal will see EQT acquire 100% of the LSP management company and 20% of the right to carried interest in certain LSP funds, according to a statement. EQT will further be entitled to 35% of the carried interest of future funds.
The acquisition is comprised of an upfront consideration of EUR 450m on a cash- and debt-free basis, made up of 25% cash and 75% EQT publicly traded shares, which will be supplied via the issue of EQT ordinary shares.
LSP is expected to generate revenues of around EUR 37m and EBITDA of around EUR 24m (excluding carried interest) in 2021. The proposed purchase price is expected to equate to a mid-teens EBITDA multiple on a run-rate basis at completion, according to a statement.
LSP is to be integrated into EQT's Private Capital Platform. EQT expects that the acquisition will complement its healthcare sector experience and provide opportunities for cooperation with other strategies, the firm said in a statement. In addition, EQT expects that LSP's life sciences network will complement its existing global healthcare advisory network, broadening the scope of potential deals.
LSP said in a statement that the integration with EQT will allow the firm to leverage EQT's fundraising, investor relations and administrative capabilities, allowing its team to devote more time to portfolio development and deal-making.
LSP makes investments in both early- and late-stage life sciences companies, focusing on the development of new medications and medical technologies.
The announcement comes shortly after LSP's largest ever fundraise: earlier in November, the firm announced that it had raised EUR 850m for LSP VII in a seven-month fundraising process, adding that the fund could reach EUR 1bn following continued investor interest and upcoming firm commitments. The fund had an initial target of EUR 750m and has made three investments to date; it expects to make 15-20 in total.
LPs in LSP VII include pharmaceutical companies, the European Investment Fund, pension funds, insurance companies and family offices, the GP said in a statement.
The GP's predecessor vehicle, LSP VI, held a final close in March 2020 on EUR 530m, surpassing its EUR 400m target, according to Unquote Data. The fund invested in 17 companies, including Germany-headquartered Arvelle Therapeutics, which the firm exited to Angelini Pharma in a EUR 960m trade sale in January 2021.
According to its website, LSP manages three further fund strategies in addition to its flagship fund: LSP Health Economics Fund II, which focuses on late-stage companies; LSP Dementia, which invests in companies focused on neurodegenerative diseases and dementia; and LSP Public, an open-ended listed fund that backs publicly listed healthcare companies.
Founded in 1998, Netherlands-headquarters LSP has a team of 34 staff, all of whom are joining EQT, and has around EUR 2.2bn in assets under management. René Kuijten, managing partner at LSP, will become partner and head of EQT Life Sciences. In addition to its headquarters in Amsterdam, the firm has additional offices in Munich and Boston.
Moelis & Company acted as financial adviser to LSP, while Allen & Overy provided legal advice and Loyens & Loeff provided tax advice.
The acquisition of LSP is EQT's second since its IPO on 2019. The firm previously acquired Exeter Property Group in January 2019 for a total consideration of USD 1.87bn with the aim of supporting the development of EQT Real Estate.
Latest News
Stonehage Fleming raises USD 130m for largest fund to date, eyes 2024 programme
Multi-family office has seen strong appetite, with investor base growing since 2016 to more than 90 family offices, Meiping Yap told Unquote
Permira to take Ergomed private for GBP 703m
Sponsor deploys Permira VIII to ride new wave of take-privates; Blackstone commits GBP 200m in financing for UK-based CRO
Partners Group to release IMs for Civica sale in mid-September
Sponsor acquired the public software group in July 2017 via the same-year vintage Partners Group Global Value 2017
Change of mind: Sponsors take to de-listing their own assets
EQT and Cinven seen as bellweather for funds to reassess options for listed assets trading underwater