Filing Flows › Royalty Pharma (RPRX) › Takeover & LBO
Is Royalty Pharma (RPRX) a takeover target?
A leveraged buyout at today's price plus 30% ($87.33 a share) would return about 3% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $37.75 a share (−44% against today's $67.18). Historically 4.2% of companies with its figures were bought within a year (0.84× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $87.33 | today's $67.18 plus 30% |
| × shares | 557.0 million | |
| = Equity value | $48.6B | |
| + Debt refinanced | $8.6B | |
| − Cash | $545M | |
| + Other claims | $3.0B | preferred stock, minority interests |
| = Enterprise value | $59.6B | 39.8× EBITDA of $1.5B |
| Fees | $1.2B | 2% of the price |
| New debt | $8.3B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $52.6B | 86% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $2.8B | $1.6B | $631M | $850M | $7.4B |
| Year 2 | $3.0B | $1.7B | $566M | $1.0B | $6.4B |
| Year 3 | $3.2B | $1.8B | $489M | $1.2B | $5.2B |
| Year 4 | $3.3B | $1.9B | $401M | $1.3B | $3.9B |
| Year 5 | $3.4B | $2.0B | $300M | $1.5B | $2.5B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 32.3× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $63.2B | |
| − Debt left | $2.5B | |
| = Buyer's equity | $60.8B | |
| Money multiple | 1.16× | on $52.6B put in |
| Buyer's yearly return (IRR) | 2.9% |
Price against return
What the buyer makes at other premiums over today's $67.18; the IRR reaches 20% at $37.75 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $73.90 | 6.2% |
| 20% | $80.62 | 4.5% |
| 30% | $87.33 | 2.9% |
| 40% | $94.05 | 1.5% |
| 50% | $100.77 | 0.2% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $2.6B | |
| EBITDA, last 12 months | $1.5B | 57.3% of revenue |
| Depreciation and amortization | $4.9M | |
| Debt | $8.6B | |
| Cash | $545M | |
| Share price | $67.18 | on Oct 30, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 8.0% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 12% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers in its sector paid a median premium of 35% over the share price before the deal (the middle half 22% to 45%), according to the 15 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Royalty Pharma would cost about $90.69 a share, $50.5B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 22% | $81.96 | $45.7B |
| Median | 35% | $90.69 | $50.5B |
| High end (a quarter paid more) | 45% | $97.41 | $54.3B |
The odds, from history
Historically 4.2% of companies with its figures were bought within a year (0.84× the average). Its figures put it in decile 4 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
Royalty Pharma's latest quarter
Royalty Pharma, Q3 2026: revenue $690M (+13% year over year), operating margin 59.5%, net earnings $145M, operating cash flow $686M. The chart follows the revenue to costs, profit and cash.
Questions
Is Royalty Pharma being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Royalty Pharma?
A leveraged buyout at today's price plus 30% ($87.33 a share) would return about 3% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $37.75 a share (−44% against today's $67.18).
What would a takeover of Royalty Pharma cost?
Takeovers in its sector paid a median premium of 35% over the share price before the deal (the middle half 22% to 45%), according to the 15 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Royalty Pharma would cost about $90.69 a share, $50.5B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.