Investor acquires shares in Mölnlycke Health Care

Investor acquires shares in Mölnlycke Health Care

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 according to the equity method 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*

           Full Year  Q2     Q1        Full Year  Q4     Q3     Q2    
Q1        Full Year
           2010e      2010   2010      2009       2009   2009   2009  
2009      2008
 (EUR m.)                                                               
         
Net Sales  970        237    215       856        224    220    212   
200       791
EBITDA     270        63     57        230        64     63     56    
47        214
Net debt   n/a        1 682  1 693     1 705      1 705  1 747  1 770  1
727     1 795

*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 (http://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