$3 billion: Two Major PE Firms Team Up to Acquire a Vaccine Rising Star

Recently, Danish vaccine giant Bavarian Nordic published an announcement titled “Recommended Public Takeover Offer” on its official website, confirming it has signed an “Offer Agreement” with a special purpose vehicle, Innosera ApS.  

 

Innosera was jointly established by funds under the management of two PE giants, Nordic Capital Fund XI and Permira.  

Two PE Giants Collaborate on a $21 Billion Privatization  

The agreement details that the two PE firms will acquire all issued and outstanding shares of Bavarian Nordic (excluding treasury shares) through Innosera, valuing the equity at approximately 19 billion Danish kroner (up to about $3 billion).  

 

 

Innosera has received equity commitment letters totaling $2.2 billion from Nordic Capital and Permira, with the remaining amount covered by bridge loans and subsequent high-yield bonds from Deutsche Bank, Goldman Sachs, and JPMorgan Chase, maintaining a leverage ratio of approximately 1:1.3.  

 

• 1) Acceptance by shareholders reaching ≥90% or the mandatory squeeze-out threshold under Danish company law;
• 2) No objections from the EU foreign investment review, the Danish Business Authority, or the US Committee on Foreign Investment in the United States (CFIUS);
• 3) No material adverse effect (MAE).  

 

If all goes smoothly, the transaction is expected to complete payment and share transfer in the fourth quarter of 2025.  

 

This is essentially a privatization deal. Post-transaction, Innosera plans to initiate a squeeze-out and apply for delisting from the Nasdaq Copenhagen, converting Bavarian Nordic into a privately held company.  

 

The board (excluding three founder directors who recused themselves) unanimously recommends shareholders accept the privatization offer, citing “significant cash premium” and reduced uncertainty from vaccine commercialization and ongoing capital market volatility.  

 

Notably, Denmark’s largest public pension fund ATP (holding 8.4%) and the founding family’s holding company Bavarian Holding (holding 11.7%) have signed irrevocable commitments, with approximately 20% of shares set to accept the offer initially.  

“The Brightest Biotech Star in the Nordics” Originating from Smallpox-Cowpox Research  

Bavarian Nordic’s origins trace back to a smallpox-cowpox research project in the 1990s by the Danish State Serum Institute (SSI) and the University of Copenhagen’s Veterinary and Agricultural College.  

 

 

In 1994, SSI scientists Steen Kølsen and Ole Lund, along with venture capitalist Niels Fjordside, founded “Bavarian Nordic A/S,” named after the founders’ vacation spot—the Bavarian Forest and Nordic Peninsula.  

 

The company started with just 12 employees, renting a 500 m² lab in a Copenhagen suburb, focusing on the modified vaccinia Ankara (MVA) virus as a gene therapy and vaccine vector.  

 

After the “9/11” attacks and the Iraq War in 2003, the US Department of Defense urgently needed a safe smallpox vaccine. In 2005, the company signed a $475 million, decade-long contract with the Biomedical Advanced Research and Development Authority (BARDA) to develop the “IMVAMUNE” smallpox/monkeypox vaccine, marking one of the largest government orders in European biotech history at the time.  

 

Leveraging this contract, Bavarian Nordic secured $55 million in Series B funding from JPMorgan Chase and Danske Bank in December 2005 and launched its IPO plans the following year.  

 

On December 15, 2006, Bavarian Nordic successfully went public with an issue price of 58 DKK per share, raising a net amount of 730 million DKK (approximately $120 million). The stock closed at 78 DKK on its debut day, achieving a market cap of about 2 billion DKK, earning it the media moniker “the brightest biotech star in the Nordics.”  

 

As of July this year, the company employs about 1,300 people, including 550 at its Danish headquarters, 300 at its German factory, and 200 in its US sales and medical affairs team. It operates three GMP facilities (Kvistgård, Berlin, and North Carolina’s Research Triangle Park), with an annual production capacity of up to 200 million doses of lyophilized/liquid formulations.  

Buyer Commits to Additional $1.5 Billion Over Five Years  

According to the *Evaluate Pharma Vaccines & Infectious Disease 2025* report, the global human vaccine market reached approximately $68 billion in 2024, with a 2020–2024 compound annual growth rate of 9.3%, significantly outpacing the overall pharmaceutical industry’s 5.1%.  

 

However, the industry is highly concentrated, with the top five players—GSK, Merck, Pfizer, Sanofi, and Novartis (pre-2024 divestiture)—accounting for over 70% of the market share.  

 

Operational data shows Bavarian Nordic generated $870 million in revenue in 2024, ranking 18th globally, though it ranks among the top three in the “non-replicating viral vector” segment alongside J&J and AstraZeneca.  

 

The company’s 2024 R&D spending was $190 million, or 22% of revenue, far above the industry average of 12%, resulting in a net profit margin of just 7%.  

 

For this privatization, the buyers stated they will “add $1.5 billion in CAPEX and R&D over the next five years to expand Denmark’s lyophilized production line and North American filling lines, while continuing to acquire late-stage assets.” The two PE giants aim to use longer-term capital to support the company’s high R&D intensity.