Gores unloads Slovenia medical-device company

During Gores Group’s ownership of Fotona Holdings, the Slovenia medical-laser maker posted compound annual sales growth of about 23 percent while profitability nearly quadrupled, the firm’s managing director, Victor Otley, told Buyouts.

Three-plus years after buying Fotona from the Slovenia government in a complex transaction, the firm unloaded its majority stake. The buyer is AGIC Capital, a Shanghai private equity firm created to help European businesses diversify their products and offerings throughout China.

Terms weren’t disclosed, but the deal commanded a valuation of $100 million to $200 million, a person familiar with the matter told Buyouts.

When Slovenia’s state fund, PDP, sold its 70.5 percent stake in Fotona to Gores in March 2014, it garnered 12.6 million euros (~$13.5 million), valuing the entire company at about 18 million euros, local newspapers reported then. Fotona was one of 15 state assets Slovenia had been seeking to privatize as it looked to bail out its banks.

Based on the reported 18 million euro (~$19.25 million) valuation in 2014, Gores sold its stake for at least 4x its value upon the firm’s initial investment.

Gores declined comment on financial details of either transaction, other than to say the reported figures in 2014 did not account for the value of Technology4Medicine, the company it partnered with to acquire Fotona.

It was through its partnership with T4Med — whose founder, Jeff Jones, is now Fotona CEO — that Gores became aware of Fotona, Otley said. T4Med at the time served as the independent distributor of the Slovenia company’s dental products in the U.S.

Fotona, headquartered in San Clemente, California, and Ljubijana, Slovenia, makes high performance lasers used by medical and dental professionals. The company’s manufacturing and R&D facilities are located in Slovenia.

The company’s global expansion put Fotona on the radar of many potential buyers, Otley said. Asia, the U.S. and Europe were the asset’s largest markets at the time of the sale, he added.

In response to numerous inbound financial and strategic inquiries, Gores around the end of Q3 2016 formally kicked off a sales process, he said.

“There were real advantages from the scale we were able to achieve from a manufacturing and product perspective,” Otley said. The release of new products also supported growth, he added.

Aamer Naseer of Piper Jaffray led the sales process, alongside the firm’s James White, Bart Federak and Matthew Fobbe, Buyouts has learned.

Action Item: For a look at Gores’s current portfolio: http://www.gores.com/portfolio/

Victor Otley, managing director at Gores Group. Photo courtesy of the firm.