Arsenal Capital Partners stands to more than quadruple its money with the sale of Certara, a source said.
On July 11, EQT said it agreed to buy the U.S. drug-development consultancy for roughly $850 million. Arsenal is retaining a minority stake.
Certara, Princeton, New Jersey, provides technology and consulting services to help pharmaceutical companies obtain approval for their treatments, Reuters said. Certara employs more than 500 people. It has worked with 1,200 commercial companies, 250 academic institutions as well as regulatory agencies across 60 countries, a statement said.
Arsenal is expected to make 4.3x its investment with the Certara sale, the person said. The deal is likely to generate a 50 percent IRR, the source said.
The New York firm acquired Certara in December 2013. How much Arsenal provided is unclear. A lower-middle-market PE firm, Arsenal invests in specialty industrials and healthcare.
Certara is the latest profitable exit for Arsenal. In June, the firm sold Flowchem, a supplier of drag-reducing agents for oil and fuel pipes, to KMG for $495 million. Arsenal was expected to make 4.2x its money with Flowchem, Buyouts reported.
Both Certara and Flowchem come from Arsenal’s third fund, which collected $875 million in 2012. Arsenal is investing out of its fourth fund, which closed at its $1.3 billion hard cap in October 2016, Buyouts reported.
Arsenal Fund III is generating a roughly 30 percent gross IRR, the source said.
EQT, Stockholm, used its seventh private equity fund to invest in Certara. EQT VII closed at 6.75 billion euros ($7.7 billion) in July 2015.
Certara is EQT’s second major U.S. healthcare investment, Reuters reported. EQT acquired Press Ganey Holdings, which provides patient-satisfaction surveys, in 2016 for $2.35 billion.
Centerview Partners provided financial advice to EQT, while Simpson Thacher & Bartlett was its legal adviser. Jefferies and William Blair were financial advisers to Certara. DLA Piper and Morgan, Lewis & Bockius were Certara’s legal advisers.
Certara and EQT could not immediately be reached for comment.
Action Item: Email Stephen McLean, an Arsenal partner and co-head of the healthcare practice, at email@example.com
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