PE Deals

Great Point to make ~5x return on Clinical Supplies Management sale

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Great Point Partners, Clinical Supplies Management, healthcare, clinical trial, private equity, merger, m&a
  • Provides clinical-trial logistics services
  • GPP invested in Fargo, ND, company in ’16 via Fund II
  • Revenue at CSM tripled during GPP’s <2 year ownership

Less than two years into its investment, Great Point Partners is poised to generate a 4.9x return by selling Clinical Supplies Management, a source familiar with the matter said.

The buyer is U.K. pharmaceutical services company Clinigen, which has agreed to buy CSM for up-front consideration of $150 million and a potential $90 million cash payment should the company achieve certain earnings targets, according to European trade publications.

Healthcare-focused Great Point invested in CSM, Fargo, North Dakota, in October 2016 through its second fund, which collected $215 million in December 2013.

The Greenwich, Connecticut, sponsor said in a Sept. 27 statement that CSM’s revenue tripled during its less than two-year ownership.

An aggressive M&A strategy fueled growth at CSM, which quickly penetrated the European market via two add-ons within three months of Great Point’s investment.

CSM bought Theorem Clinical Supplies of Frankfurt in December 2016 and B&C Group of Brussels in January 2017.

More than half CSM’s revenue generation stemmed from Europe following the pair of acquisitions, according to a case study on the sponsor’s website.

In connection with its investment, Great Point also recruited industry veteran Scott Houlton as CEO, enabling CSM founder and owner Gerald Finken to become chairman, the case study said.

Houlton is a former executive of Aptuit, Quintiles and Catalent.

Founded in 1997, CSM provides logistics services to manage and improve the efficiency of the clinical-trial supply-chain process.

These includes packaging, labeling, storage and global distribution services, among other things, of clinical-trial supplies that are needed in Phase 1 through Phase IV drug studies.

Great Point makes minority and majority investments in healthcare companies in the U.S., Canada and Western Europe.

The firm targets companies that produce $10 million to $100 million of revenue and $2 million to $12 million of Ebitda, with equity investments ranging from $7 million to $50 million.

Action Item: Learn more about Great Point Partners’ strategy

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