Orion is selling a unit of its diagnostics business to private equity firm Axcel Management for about $200 million. In addition, the Espoo, Finland-based company could receive milestones of up to $73 million. The deal is expected to close sometime during the second quarter of 2018.
The Orion Group has two business areas, or operating segments: Pharmaceuticals business and Diagnostics business, which consists of Orion Diagnostica business division. Orion Diagnostica operates as an independent business and it has no material business synergies with the Pharmaceuticals business.
The company first announced it was reviewing strategic options for Orion Diagnostica back in Jan.according to a release from the company. Orion Diagnostica specializes in point-of-care tests.
The sales for Orion Diagnostica's most recent reported year were $67 million (about 5% of the Orion Group's Net sales) and operating profit $10.3 million (about 3% of the Orion Group's Operating profit).
"Orion Diagnostica has operated as an independent business and it has no material business synergies with Orion's other operations,” Timo Lappalainen, Orion’s president and CEO said in a release. “The sale of the division will allow us to further focus on growth and achieving our financial goals. Orion is currently working on numerous projects that target growth in our core area of the Pharmaceuticals business. For example, we are actively evaluating late stage in-licensing opportunities. We also continue to invest in our own research and development activities, with new clinical trials, for example. The capital gain from the transaction will strengthen our equity position and maintain our ability to achieve our dividend distribution objective.”