Investor acquires shares in Mölnlycke Health Care

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Investor has reached an agreement with Morgan Stanley Principal Investments (“MSPI”) and certain of its affiliated entities to acquire their 34 percent equity stake (including the previous purchase of 4 percent communicated in the most recent quarterly report) in Mölnlycke Health Care Group (“Mölnlycke”) for a total cash consideration of EUR 510 m., implying an enterprise value of EUR 3.2 bn. Subsequent to the transaction Investor will own 96 percent and Mölnlycke’s management and board will own the remaining shares.

 Mölnlycke is a world leading manufacturer and provider of single-use surgical and wound care products and services, primarily for the professional healthcare sector. Investor together with MSPI initially invested in Mölnlycke early 2007. In 2009* Mölnlycke recorded sales of EUR 865 m. and EBITDA of EUR 236 m. For 2010 the company forecasts sales of EUR ≈970 m., EBITDA EUR ≈270 m. and EBITA of EUR ≈245 m.

 *Refers to the regular calendar year, not with one month’s delay as normally reported by Investor.

“When we made our initial investment in 2007, a plan was established aimed at accelerating growth through focus on increased market presence, product launches and R&D. Mölnlycke’s management has successfully executed on this plan. We believe Mölnlycke is well positioned to deliver growth and margins at least in line with the levels recorded during the past two years. This, combined with Mölnlycke’s strong cash flow profile makes it attractive to increase our ownership”, comments Investor’s CEO Börje Ekholm.

 “The company has made strong progress over the last three years. We've enjoyed a fruitful and successful partnership with Investor and Mölnlycke's management team and we wish them well as they take the business forward", says Paul J. Taubman, co-President, Institutional Securities at Morgan Stanley.

 “We have had a very good working relationship with both owners over the last three years, and we have been very pleased with the way they have supported the expansion and development of Mölnlycke Health Care. Clearly, our leading owner, Investor AB, has always encouraged us to actively invest in the long term development of Mölnlycke Health Care. With their active support and commitment, we are confident that we will be able to deliver on the many opportunities that we have in the pipeline to achieve high growth and profitability for many years to come”, comments Mölnlycke´s CEO Pierre Guyot. 

 Mölnlycke will be consolidated as a subsidiary to Investor AB and continue to be reported as part of the Operating Investments business area. Existing debt financing has no guarantees from Investor AB.

 The reported equity value of Investor’s holding in Mölnlycke after closing, including the existing ownership, will following IFRS accounting be based on the valuation of today’s announced transaction. According to accounting methodology the equity value will be affected by a number of factors such as operating performance and currency effects up until inclusion in Investor’s accounts.

The acquisition is subject to approval from relevant competition authorities, which is expected during the fourth quarter.

Investor’s view of Mölnlycke Health Care
Mölnlycke has very strong market positions, a highly competitive product offering and a promising product pipeline. This and its expanded sales force and R&D resources create a platform for the company to keep growing in line with or above its current pace, hence outgrowing the overall market. Furthermore, the company’s strong cash flow generation opens up for additional growth initiatives, both organic as well as through acquisitions. With several important products still ramping up, there is room for further profitability improvement. 

Key Figures Mölnlycke Health Care*

*Except for the 2010 full year estimate, all figures are reported with one month’s delay (in line with Investor’s reporting standard for Operating Investments).

Press meeting
A press meeting will be held today in Stockholm, August 26, at 10:30 a.m. CET, at Investor AB headquarters on Arsenalsgatan 8C with Investor’s President and CEO Börje Ekholm and Pierre Guyot, CEO of Mölnlycke Health Care.

The press conference will be in English and webcasted through our website www.investorab.com where you can also ask questions. If you prefer to listen to the presentation, please call +44 203 043 24 36, +1 866 458 40 87 or +46 8 505 598 53.

The presentation material will be published on our website after the meeting, where you can also view and listen to the proceedings of the conference afterwards on-demand. 

For further information:
Oscar Stege Unger, Head of Corporate Communications, Phone +46 8 614 2059, +46 70 624 2059
Magnus Dalhammar, Investor Relations Manager, Phone +46 8 614 2130, +46 735 24 2130

Our press releases can be accessed at www.investorab.com on the Internet. Investor AB is a Nordic-based industrial holding company founded almost one hundred years ago by the Wallenberg family. Today we have investment activities in Europe, the United States and Asia. The business concept is to generate attractive long-term returns for our shareholders by owning and developing companies with solid potential for value creation. We are an engaged owner and apply experience, knowledge and a unique network to develop listed and unlisted companies to make them best-in-class.

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