Altor sells Apotek Hjärtat for SEK 5.7bn

The GP's head of communications, Tor Krusell, told unquote" that Altor had invested in the vicinity of SEK 4bn in the pharmacy group, including the initial acquisition, over the lifetime of the investment.

The deal will see ICA wholly acquire Apotek Hjärtat from minority shareholders and the GP, financed through a combination of cash and existing credit facilities. Altor has owned the company through its €2bn Altor Fund III since 2008.

Altor had initially sought to list its portfolio company in Stockholm, having revealed its IPO preparations in June 2014. The process went so far as to have been approved by the regulatory committee of the Stockholm stock exchange on 7 November.

Fredrik Strömholm, a partner at Altor and an Apotek Hjärtat board member, said the GP's negotiations with ICA had become substantial in mid-October.

The firm had been working on a flotation since the early summer, but launched a second sale track in early autumn.

ICA's acquisition will bolster its position in the Swedish pharmacy market, as it already owns the Cura pharmacies. Following the deal, Apotek Hjärtat and Cura Apoteket will be combined into a separate subsidiary of ICA Gruppen.

Together, the two will have the second-largest share of the Swedish market at around 30% and total revenues of SEK 11bn.

The deal is subject to customary approvals before completion.

The sale of Apotek Hjärtat comes as Altor is being scrutinised in the wake of the shock bankruptcy of OW Bunker, just seven months after the GP had listed the Danish bunker fuel company, in which it still held a 35% stake.

Previous funding
Altor bought the pharmacy chain in 2008 for an estimated $250-500m, when the Swedish government sold off the previously state-owned pharmacies.

In the years following the deal, Altor backed a buy-and-build strategy for the pharmacy group, which included acquisitions of Apotek1 and Vårdapoteket, as well as investments in its own distribution network and e-commerce.

Company
Formally founded in 2009, Apotek Hjärtat is a pharmacy and beauty products retailer with more than 300 outlets across Sweden.

It had net sales of SEK 8.26bn in 2013 with a loss of SEK 32m, though profits from January to September this year have been SEK 12m.

Apotek Hjärtat is based in Stockholm and employs 2,000 people.

Advisors
Equity – ABG Sundal Collier (Corporate finance); Gernandt & Danielsson (Legal).

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