Nycomed spin-off for $6bn float

By MALCOLM WITHERS
Updated:

 

Nycomed Amersham, Britain's first privatised State-owned business under Margaret Thatcher, is to spin off its life sciences division in the US. The former Amersham International could be valued at up to $6bn (£4.1bn) on Nasdaq.

The division - Amersham Pharmacia Biotech - will be renamed APBiotech Inc. It is a joint venture with Pharmacia of Sweden and analysts have previously valued the new company at between £4bn and $6bn. Its US rival, PE Biosystems, is valued at $19.5bn (£13.3bn). Floating off 10% could raise up to $600m for Nycomed Amersham.

The division makes hi-tech equipment used in research into how human beings are made up. The equipment helps with the discovery and diagnosis of illnesses.

Following the flotation, which is still being negotiated with the US Securities and Exchange Commission, Nycomed Amersham and Pharmacia will each own 45% of the equity. The remaining 10% will be owned by US institutions. The float may take place later this year or early next year, depending on the SEC.

Nycomed Amersham will still have the power to appoint the chairman and chief executive of APBiotech. It will also retain the right to buy up to 20% of Pharmacia's stake in June 2002 and the rest of its equity in January 2004.

In the six months to June APBiotech made an operating profit before integration costs and goodwill write-downs of £29m.

After flotation APBiotech will report its financial results quarterly. Chief executive Sir William Castell will now concentrate the remaining business on discovering drugs rather than providing the equipment for others to do so.

He joined the company in 1990 and has been responsible for injecting commercial reality into the group which was created by the old Atomic Authority as its radiological unit. It was the first of the Tory privatisations in 1982.

Castell promoted a merger with Sweden's Pharmacia Biotech in 1997 to create the world's largest research-based biotechnology supply company and later a merger with Norway's Nycomed.

Newly-formed APBiotech admitted that 'profits exhibit significant seasonal variation, reflecting customer purchase patterns'. Nycomed Amersham shares jumped 18p to 672p.

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