Apax sells Neuraxpharm to Permira

Harriet Matthews
22 September 2020

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London-headquartered Apax Partners has sold its majority stake in Germany-based central nervous system (CNS) pharmaceutical products producer Neuraxpharm in an SBO to Permira.

The transaction remains subject to regulatory approval and is expected to close in Q4 2020.

According to a statement from listed investment firm Apax Global Alpha, the sale is expected to generate a gross money multiple of 3.5x and a gross IRR of 36%. The deal represents an uplift of 66% to Neuraxpharm's last unaffected valuation in the quarter prior to the sale.

The business is valued at more than €1.6bn, Unquote understands.

Unquote sister publication Mergermarket reported that Neuraxpharm is expected to generate EBITDA of around €95m in 2020 and that Apax was seeking a valuation of 14x EBITDA, with banks likely to offer leverage of up to 6x.

Apax acquired Spain-based Invent Farma in 2016, and later bought Neuraxpharm, subsequently merging the companies as part of its sector consolidation strategy. During Apax's investment period, Neuraxpharm completed 70 bolt-ons, product acquisitions and in-licensing agreements, according to a statement. These included the acquisition of Austria-based OTC Easypharm in January 2020. It also acquired Glenmark's CNS product portfolio.

The GP invested in Neuraxpharm via Apax VIII, which held a final close in June 2013 on €5.8bn. The fund was fully deployed as of June 2017 and made equity investments of €200-450m.

According to Unquote sister publication Debtwire, BNP Paribas, Unicredit and Societe Generale provided a €400m debt package to support the deal.

In January 2020, Neuraxpharm completed a refinancing and dividend recap comprising a €541m term loan B, a €35m acquisition facility and a €60m rolling credit facility arranged by BNP Paribas, Sumitomo Mitsui Banking Corp and Wilmington Trust, according to Debtwire.

Permira has invested in Neuraxpharm via Permira VII, which held a final close in October 2019 on its hard-cap of €11bn. The fund deploys equity tickets of €250-1bn with enterprise values of €500-3bn.

Apax Partners and Permira declined to comment.

Company
Founded in 1985, Neuraxpharm develops and commercialises treatments for CNS-related neurological and psychiatric disorders, such as epilepsy, Alzheimer's and depression. Its product portfolio comprises more than 115 CNS molecules, according to a statement.

Based in Langenfeld, Neuraxpharm generates revenues of €460m and employs 850 people. It reported revenues of €90m and employed 100 people in 2016, at the time of Apax's initial investment.

People
Neuraxpharm – Jörg-Thomas Dierks (CEO).
Apax Partners – Arthur Brothag, Steven Dyson (partners).
Permira – Jörg Rockenhäuser (head of DACH).

Advisers
Equity – Rothschild (M&A); Serber & Co (corporate finance); Clifford Chance (legal).
Vendor – Jefferies (M&A); Linklaters (legal); PwC (financial due diligence, tax).