April 21, 2018 / 6:41 AM / in a month

Finnish drug maker Orion to sell diagnostic test business for $200 mln

HELSINKI (Reuters) - Finnish drug maker Orion (ORNBV.HE) said on Saturday it has agreed to sell its Diagnostica division to a Nordic private equity company Axcel Management for 163 million euros ($200 million).

Orion said that it would later get an additional payment of up to 60 million euros depending on Axcel’s return on the investment at the time of its exit.

Orion announced in January that it was evaluating a possible sale of the division. The business makes diagnostic tests and generated 54 million euros of sales last year, or about 5 percent of the group’s total sales.

“Orion Diagnostica has operated as an independent business and it has no material business synergies with Orion’s other operations... The capital gain from the transaction will strengthen our equity position and maintain our ability to achieve our dividend distribution objective,” Orion CEO Timo Lappalainen said in a statement.

    Analysts have estimated the divestment could prompt a special dividend.

    Orion, which has been hit by tougher competition after the expiration of its patents, forecast 2018 sales excluding the diagnostic business to be flat or slightly lower, compared to 2017. Operating profit, excluding the business and capital gains, is expected to fall, it said.

    The deal is expected to close during the second quarter.

    ($1 = 0.8139 euros)

    Reporting by Jussi Rosendahl; Editing by Shri Navaratnam

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