Camden scores 31x MOIC on Paragon, via $1.2 bln sale to Catalent

  • Camden and NewSpring invested in company in Oct. ’18
  • Sell-side adviser: William Blair
  • Baltimore CDMO projects >$200 mln in 2019 revenue

Baltimore’s Camden Partners generated a multiple of invested capital of 31x on Paragon Bioservices through its recent sale to Catalent, according to a person with knowledge of the matter.

Furthering its push into the universe of gene therapies, Catalent in late May completed its $1.2 billion all-cash acquisition of Paragon, a contract development manufacturing organization specializing in the fast-growing field of medicine.

In connection with the deal, Catalent, a drug development company, issued $650 million convertible preferred stock to Leonard Green & Partners. LGP Partner Peter Zippelius joined Catalent’s board.

The transaction concluded a William Blair-run sales process aimed at strategic buyers, the source said, as drugmakers and contract manufacturers grow increasingly eager to expand their gene therapy capabilities.

Paragon, founded in 1990 by Marco Chacon and led by CEO Pete Buzy, focuses on viral vector development and manufacturing for gene therapy companies.

Based in University of Maryland BioPark in Baltimore, Maryland, the CDMO specializes in gene therapies delivered via adeno-associated virus vectors, among other gene therapies, next-generation vaccines, oncology immunotherapies, therapeutic proteins and complex biologics.

The company is expected to generate north of $200 million in 2019 revenue, a Catalent announcement said in April.

Camden Partners invested in Paragon in October 2014 through a Series A round alongside Radnor, Pennsylvania’s NewSpring Capital.

The initial investment was co-led by Christopher Kersey, then a managing member and partner of Camden, and NewSpring Partner Kapila Ratnam. Both Kersey and Ratnam assumed board representation in connection with the transaction.

Camden Partner Donald Hughes later joined the board amid Kersey’s departure from the firm about two years ago.

Kersey left Camden to launch Havencrest Capital Management, a Dallas-based growth buyout firm that invests exclusively in healthcare. Havencrest’s debut fund raised $200 million in June 2017.

Chacon, who remains chairman of the board of Paragon, also serves as an operating partner at Havencrest.

Centerview Partners advised Catalent on the transaction, while UBS advised LGP.

Camden Partners declined to comment.

Action Item: Check out Havencrest’s latest Form ADV: https://bit.ly/2XZpIHK