EQT Mid Market buys nicotine gum maker Fertin Pharma

The GP tapped its 2016-vintage EQT Mid Market Europe fund for equity in the deal, which was reported to value Fertin in excess of DKK 2bn.

As part of the buyout, the Bagger-Sørensen family will reinvest in the business alongside EQT, taking a 30% stake, while the GP and management hold the balance.

According to market sources, EQT saw off competing bids by Nordic private equity firm Triton Partners and Sweden-based tobacco maker Swedish Match in the auction process. The sale was run by Danske Bank, which was engaged by the vendor around August 2016.

Debt
The deal was supported by an all-senior debt package provided by a club of Nordic banks consisting of Danske Bank, Nordea, SEB and Nykredit, at 6x 2016 EBITDA, according to unquote" sister publication Debtwire.

With a projected 2016 EBITDA of DKK 250m, the financing package would amount to around DKK 1.375bn. It includes a capex facility and a revolving credit facility.

Company
Headquartered in Vejle, Fertin Pharma is a developer and maker of private-label medicated chewing gum, with a particular focus on nicotine gum.

The company was founded in 1915 as a confectionery business, later launching the Dandy chewing gum brand. Following the acquisition of Sweden's Fertin in 1978, the business was renamed as Fertin Pharma. It launched its first coated nicotine gum product in 2000.

According to a statement by EQT, Fertin is projected to record turnover of DKK 851m in 2016, with DKK 250m in EBITDA.

People
EQT Mid Market – Rikke Kjær Nielsen (director).
Fertin Pharma – Søren Birn (CEO).

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