Private equity firm Riverside Co. sold its in vitro diagnostics company to listed, California-based Gen-Probe for $53 million, earning the sponsor a 2.6x cash-on-cash return and a gross IRR of 46 percent. The private equity firm has maintained a busy pace of LBOs throughout the second half of 2010.
The Riverside Company has sold GTI Diagnostics (GTI) to Gen-Probe (NASDAQ: GPRO), a major client of GTI. The sales price was approximately $53 million on a net cash basis, and the transaction generated a gross cash-on-cash return of 2.6x and a gross IRR of 46% for Riverside and its investors.
Waukesha, Wisconsin-based GTI started as a subsidiary of the Wisconsin Blood Center in Milwaukee in 1985 and has grown to be one of the top developers and manufacturers of blood diagnostic assays for medical laboratories.
GTI is an in-vitro diagnostics specialist focused on the transplantation, blood bank and specialty coagulation markets. They are industry leaders in the field of transplant diagnostics, and also have a strong presence in coagulation and transfusion-related blood bank products.
GTI was an investment in the Riverside Micro-Cap Fund I (RMCF). The sale marks the first realization for RMCF I. GTI is the 10th 2010 exit for Riverside.
“We used our exceptional operating and healthcare expertise to drive rapid growth at GTI,” said Riverside Managing Partner Loren Schlachet. “We were able to partner with a great management team at GTI to build on the company’s strengths and position it for continuing excellence.”
During its ownership period, Riverside concentrated on improving GTI’s sales, and boosted its presence in Europe, Australia and Asia while expanding the company’s product offerings and growing organically. GTI also benefited from Riverside’s operational expertise, which helped improve the company’s profitability, improved inventory control, reduced working capital requirements, and optimized pricing.
“GTI’s remarkable success during our hold period was driven by new product introductions and deepening its client relationships,” said Riverside Operating Partner Dan Colbert. “We’re proud to have worked with the strong management team at GTI, and we’re confident the exceptional employees at GTI will continue to do innovative and life-changing work.”
Working with Schlachet and Colbert on the deal for Riverside were Partner Simon Feiglin, RMCF Centralized CFO Dan Stankey and Analyst Garrett Thompson.
Jones Day provided legal counsel to Riverside on the transaction.
The Riverside Company (www.riversidecompany.com or www.riversideeurope.com)
The Riverside Company is a global private equity firm focused on acquiring growing enterprises valued at up to $200 million (€200 million in Europe). The firm partners with strong management teams and enhances its investments through acquisitions and organic growth. Since its founding in 1988, Riverside has invested in more than 240 transactions with a total enterprise value of more than $5.4 billion/€4.4 billion. The firm’s portfolio in North America, Europe and the Asia Pacific region includes 71 companies with roughly 14,000 employees. Riverside completes acquisitions smoothly thanks to $3.4 billion/€2.7 billion in assets under management, more than 195 professionals in 19 offices, and longstanding relationships with partner lenders.