Shares in private equity giant KKR (KKR) were higher today after it made a $1.2 billion takeover offer for Swedish biotechnology company Biotage.
Boost Value
KKR stock was 2% higher in pre-market trading as it said its money and resources could lead to a significant “strategic repositioning” of Biotage to drive future growth and boost its value.
Biotage is a life sciences company involved in drug discovery and development, diagnostics and analytical testing. Its work includes developing sample preparation products that help anti-doping labs catch cheating athletes.
KKR currently owns a 17% stake in the Swedish listed group through Gamma Biosciences, which it controls. Its offer values Biotage at 11.61 billion Swedish kronor or around $1.22 billion.
The investment firm is offering Biotage shareholders 145 kronor a share in cash, a 60% premium to Thursday’s closing price. The board of Biotage has recommended that shareholders accept the offer.
“We believe this strategic development is better done in a private setting while expanding further into new product areas in order to build a broader platform, organically or through M&A,” said Kugan Sathiyanandarajah, partner at KKR and board member of Biotage.
Growing Biotechnology Demand
There is certainly a lot to go at for the prospective new venture given that, according to Cervicorn Consulting, the global biotechnology market size is expected to soar from $1.68 trillion in 2024 to $3.54 trillion in 2033 thanks largely to the growing demand for therapeutics for rare diseases.
The potential deal continues a stream of recent KKR M&A activity including moves for German IT group Datalogic and U.K. healthcare property firm Assura.
This is despite widespread fears that private equity firms are looking to “shut up shop” and pause potential deals given concerns over the health of the global economy as a result of President Trump’s tariffs plans.
Is KKR a Good Stock to Buy Now?
On TipRanks, KKR has a Strong Buy consensus based on 11 Buy and 1 Hold rating. Its highest price target is $194. KKR stock’s consensus price target is $140.50 implying an 43.44% upside.
