Private equity buyers circle G-CON, biotech-construction play

G-CON, a specialist in portable cleanrooms that support biotech manufacturing, is likely to trade hands at a more than $400m valuation.

G-CON, which builds cleanrooms – or controlled environments – to support much-needed biotech manufacturing capacity, is up for sale, three sources familiar with the matter told PE Hub. 

First-round bids have been submitted for the rapidly growing business, with the process having recently entered its second round, the people said. Jefferies is offering sell-side financial advice, they said. 

G-CON has fielded significant interest from private equity firms evaluating the investment opportunity through different playbooks: a healthcare lens, or rather, through an infrastructure, engineering or real estate strategy, sources said. Strategic buyers are also in the mix.

The company generated about $40 million in revenue in 2020 and expects to command more than $400 million in a potential transaction, some of the people said – indicating a more than 10x 2020 revenue multiple.

G-CON, based in College Station, Texas and backed by VCs including Pfizer Ventures and WB Global Partners, is “growing like a weed,” one source commented. Two other sources pointed to G-CON’s role in the construction of cleanrooms in the cell and gene therapy sector, one of the fastest growing fields of medicine today. 

R&D spend is flooding into the sector and biotechs are still paying contract development manufacturing organizations Paragon and Brammer to hold cleanrooms for cell and gene therapy. As a result, demand for G-CON’s services will be there for years to come, one source noted. 

From a healthcare standpoint, investing in G-CON is also viewed as a means to ride the growth in cell and gene therapy without taking on FDA risk, another person said. 

For example, PE firms have invested behind supply chain specialists like Cryoport, which last year scored a $275 million PIPE investment from Blackstone Tactical Opportunities. Welsh, Carson, Anderson & Stowe in February committed up to $250 million to a strategic partnership with Kiniciti, a newly formed platform looking to invest in non-therapeutic companies supporting cell and gene therapy.

Founded in 2009, G-CON designs, produces and installs prefabricated cleanrooms that are called PODs. It helps ease capacity problems for a variety of dimensions and purposes, from laboratory environments to personalized medicines and even production process platforms.

PODs are unique from traditional cleanroom facility structures due to the ease of scalability, mobility and the ability to repurpose the PODs once the production process reaches the end of its lifecycle, according to the company. 

G-CON, Jefferies, Pfizer Ventures and WB Global Partners declined to comment.

Correction: This report has been updated to to clarify the multiple is based upon revenue, and not EBITDA.