Capiton AG moved its portfolio company KD Pharma Group into a continuation fund for more time to manage the asset, the firm said Dec. 11. Pantheon and Aberdeen Standard Investments led the deal alongside other investors. Capiton invested in KD Pharma in 2013 through its fourth fund. LPs in Fund IV were able to fully or partially cash out of their interests in the company or roll their exposure to the company into the continuation fund. Park Hill Group worked as secondary adviser on the deal.
Capiton AG closes single-asset secondary transaction of KD Pharma Group SA and raises new single-asset fund.
KD Pharma Group is a worldwide leading omega-3 ingredients producer focused on highly purified omega-3 fatty acids for pharmaceutical and nutraceutical products.
Since the acquisition by capiton IV fund in 2013, KD Pharma has grown from a single-digit revenue business to one of the industry’s largest players.
About the transaction
Capiton initiated a GP-led single-asset secondary transaction to provide its portfolio company KD Pharma with the necessary duration and follow-on capital to finance the significant future growth potential expected. The transaction was highly oversubscribed enabling Capiton to successfully close the fundraising for its new single-asset continuation fund.
Through a competitive bidding process, the transaction gives existing limited partners of Capiton IV fund the option to (partially or fully) sell their stake in KD Pharma or to stay (partially or fully) invested in KD Pharma via a continuation fund and participate in the expected upside potential. The transaction also gives new investors the opportunity to invest in a very attractive, strongly growing portfolio company. Pantheon and Aberdeen Standard Investments participated as principal new investors alongside other renowned institutions.
Under the new fund structure Capiton will continue to manage its portfolio company KD Pharma as general partner post-closing. Capiton is planning to further grow the business organically both via increased internationalization and product expansion, leveraging KD Pharma’s leading market position, as well as through targeted acquisitions. For this, a new debt package has been secured for KD Pharma Group in parallel to the secondary transaction, as well.
Capiton was supported in this secondary transaction by PJT Park Hill (secondary advice), CMS Hasche Sigle, P+P Pöllath + Partners, Stephenson Harwood (legal advice), EY (finance, tax, structuring), Roland Berger (commercial) and Duff & Phelps (fairness opinion). The new investors were supported by Debevoise & Plimpton and Hogan Lovells (legal advice) as well as Euclid Transactional (W&I insurance). The transaction was notarized by BMH Bräutigam.
Capiton AG is an independent, owner-managed private equity firm that manages a total fund volume of €1.0 billion.