New investor to fund LGC expansion

Related tags Lgc Venture capital

Senior executives at LGC, a UK-headquartered provider of
pharmaceutical reference materials and analytical and diagnostic
services, are gearing up for a secondary buyout that will help it
to accelerate its expansion into international markets.

The company has agreed terms with private equity investor Legal & General Ventures (LGV) in a deal that could see the latter acquire the majority stake in LGC held by venture capital firm 3i Group.

LGC has seen some spectacular growth since being formed seven years ago with the backing of 3i and the Royal Society of Chemistry, with turnover rising from £15 million (€21.5m) to £52 million over that period, and profits rising 10-fold. The cornerstone of the business was its role as the UK's national measurement laboratory for chemical and biochemical analysis, but latterly it has expanded its activities to include clients in the public and private sectors across Europe.

Last year, LGC expanded its base with the acquisition of German custom synthesis firm Mikromol, providing its first laboratory facilities outside the UK, as well as the purchase of Italian reference materials firm Erre Emme. Its LGC Promochem unit claims to offer Europe's most comprehensive source of pharmaceutical reference substances and impurities, as well as a range of high purity solvents.

LGV has valued the company at £70 million and senior debt has been arranged by HSBC, Bank of Ireland and SG Corporate and Investment Banking. The firm operates a 'buy and build' strategy, often providing the exit route for early-stage VC companies.

LGC shareholders have until 20 January to consider the offer.

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