Finnish pharmaceutical company Orion has agreed to sell its Diagnostica unit to Nordic private equity firm Axcel Management’s investment fund for about €163m.

The move follows a strategic review of the Orion Diagnostica business initiated by the company in January this year, resulting in consideration of potential divestiture.

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In addition to the €163m fixed purchase price, Orion is eligible for a variable component payment of up to €60m based on return-on-investment for Axcel at the time of exit.

“The company expects a capital gain of approximately €128m in other operating income for this year, excluding the variable component.”

Orion president and CEO Timo Lappalainen said: “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.

“The capital gain from the transaction will strengthen our equity position and maintain our ability to achieve our dividend distribution objective.”

The company expects a capital gain of approximately €128m in other operating income for this year, excluding the variable component.

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In 2017, Orion Diagnostica recorded €54m in net sales, with an operating profit of €8.9m. By the end of the year, the business had 282 employees.

Axcel Management partner Thomas Blomqvist said: “Together with Orion Diagnostica’s management and employees, we intend to further develop the company into an even stronger operator in the global diagnostics market.

“On the back of an attractive customer proposition and a strong market position, we see great opportunity to grow Orion Diagnostica further both geographically and by expanding its product offering.”

After receiving necessary approvals, the acquisition is scheduled to be completed during the second quarter of this year.