LSP, headquartered in Amsterdam, the Netherlands, is a venture capital firm that invests in innovative companies with strong scientific and clinical rationale across several life sciences strategies. The Company was founded in 1998 and today is one of Europe’s largest and most experienced life sciences investment firms. LSP employs 34 professionals across its offices in Amsterdam, Munich, and Boston.

Over the past two decades, LSP has invested in over 150 life sciences companies, generated strong returns, and built a top-performing life sciences franchise. As part of EQT, the LSP team will be able to continue to operate in the same successful manner as they have been operating over the past two decades. The entire LSP team, including all partners and employees, will join EQT.

LSP is expected to generate approximately EUR 37 million in revenues and approximately EUR 24 million in EBITDA (excluding carried interest) during 2021. The proposed consideration is expected to equate to a mid-teens EBITDA multiple on a run-rate basis at completion.

Strategic rationale

• Strong scalability benefits for both parties. LSP brings a deep scientific knowledge base, which will enable thorough assessment of scientific risk and development of science-based companies. As part of EQT, LSP can continue to grow its business while leveraging the full EQT platform, including fundraising support, in-house digitalization, and sustainability capabilities. LSP’s broad life sciences network is a great asset and is complementary to EQT’s global healthcare advisory network
  
• Access to new types of investment opportunities and a broadened investable universe for both parties. By joining forces, LSP and EQT will broaden the potential scope of deals for both parties, with the opportunity to future-proof more healthcare companies and make an even greater impact on society
  
• Strong cultural fit and aligned investment philosophy. LSP and EQT share a thematic approach to investments and value creation, with a values-based corporate culture

Per Franzén, Partner and Head of EQT Private Capital, said, “EQT has a long history of developing strong healthcare companies, and today we are one of the largest and most active private equity investors in the sector globally. Integrating LSP within EQT’s Private Capital platform will bring compelling cross-pollination opportunities for our other strategies and complement our sector expertise – making EQT an even better and more innovative healthcare investor.”

René Kuijten, Managing Partner at LSP, and incoming Partner and Head of EQT Life Sciences, said, “Europe has many attractive life sciences companies. Together with EQT, one of the largest European private equity firms with more than EUR 70 billion under management, LSP can select, develop, and finance these opportunities even better than before. Given the strong cultural fit and the complementarity between our organisations, we are convinced that joining forces is a win-win for our investors, our portfolio companies, our LSP colleagues, and the broader European life sciences ecosystem.”

Martijn Kleijwegt, Founder and Managing Partner at LSP, added, “The partnership with EQT not only accelerates LSP’s growth opportunities in an unprecedented way but also guarantees the long-term continuity of LSP’s active role in the life sciences industry in Europe and beyond. Having started the firm in 1998, I feel proud to have built the firm with all the partners and other colleagues, and I feel very good about where it has landed today.”

Michael Bauer, Partner and Co-Head of EQT's Global Healthcare sector team, said, “We are truly excited about the opportunity to join forces with LSP and form EQT Life Sciences. The EQT and LSP teams have complementary skill sets, and the combination will allow us to support healthcare companies and their management teams in a unique way. The life science industry is going through a phase of unprecedented innovation and, through the partnership with LSP, EQT will be able to participate in this growth opportunity and open up doors for attractive new investments in the space.”

Key transaction details

• EQT AB to acquire 100 percent of the LSP management company and 20 percent of the right to carried interest in select LSP funds. In addition, EQT AB will be entitled to 35 percent of the carried interest of future funds, which is in line with existing EQT policies
  
• Upfront consideration amounts to EUR 450 million (on a cash- and debt free basis) comprising of 25 percent cash and 75 percent EQT AB publicly traded shares (through issue of EQT AB ordinary shares, with the number of shares to be issued determined by the 10 day VWAP of EQT AB ordinary shares as of signing (equal to approximately 7.2 million shares, corresponding to a dilution of approximately 1 percent). In addition, a potential earn-out payment of EUR 25 million will be made if certain short-term fundraising targets are met
  
• Share consideration for LSP’s owners will be subject to customary lock-up provisions which will expire following the fourth anniversary of the completion of the Transaction (or, if earlier, by the end of Q1 2026)
  
• The issuance of new EQT AB ordinary shares is based on the authorization granted by the annual general meeting held in 2021
  
• The transaction is subject to customary closing conditions, including antitrust, regulatory and certain fund investor clearances. The Transaction is expected to close in Q1 2022
  
• The Transaction is expected to be accretive to EQT AB's earnings in 2022

Contact
EQT Press Office, press@eqtpartners.com, +46 8 506 55 334

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