Apax sells Neuraxpharm 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).

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• Topics
• Exits
• Buyouts
• DACH
• Healthcare
• Secondary buyout
• Germany
• Apax Partners
• Permira