The buyout of Labco, a European medical diagnostic service company with a presence in seven EU countries and a network of more than 160 laboratories, comes just weeks after the company abandoned plans for an €545m IPO on Euronext Paris. The company explained the decision to forego the IPO as “due to the recent volatility across global financial markets.”
Cinven’s investment and sector experience is expected to help Labco grow internationally by expanding operations and services across Europe and worldwide. This isn’t Cinven’s first foray into healthcare companies. Last year, the private equity firm bought CRO Medpace for $915m, and it also previously bid on PRA International back in 2013.
Backed by its 6,000 employees and medical personnel in France, UK, Spain, Portugal, Italy and Belgium, Labco performs 150m tests per year. The company generated revenues totaling €650m and EBITDA of €131m in 2014.
The management team will continue to be led by Philippe Charrier, CEO, along with Labco’s existing management teams.
Stuart McAlpine, Partner at Cinven, said: “As one of Europe’s largest operators of clinical labs, Labco has the scale to deliver both cost efficient routine testing and the full spectrum of specialist testing to its customers across its core markets and beyond. The diagnostics market benefits from growth trends driven by demographics, medical technology advances and increased hospital outsourcing.”
3i, a London-based private equity firm that owns 17% of Labco, said Thursday that it will receive $63m from the sale to Cinven, according to Bloomberg News. Rothschild & Cie, Deutsche Bank, Morgan Stanley, Barclays, HSBC and Natixis acted as advisors to Labco for the transaction.