European healthcare specialist ArchiMed has netted an internal rate of return of 400 percent on its first portfolio company sale, according to a statement from the firm.
The firm has sold French health ingredients company HIS to Germany-headquartered natural ingredients group Döhler in a deal valuing HIS at more than €25 million and generating a return of close to 2.5x.
The sale comes less than a year after ArchiMed acquired its stake in HIS using capital from its inaugural fund, Med I FIA, which closed above its initial €120 million target on €150 million in June 2015.
ArchiMed worked with the HIS management team to formulate a new strategic plan based on an improved ESG policy, recruitment, greater production capacity and expansion into consulting services.
HIS intends to expand its revenues and profits using Döhler’s 47 worldwide production and application centres and its sales presence in more than 130 countries.
“HIS is now a service provider and not only a best in class product provider,” HIS chief executive Maxime Angelucci said in the statement.
“ArchiMed was the perfect partner for this transformational step, being strongly involved at the conceptual, financial and operational levels. We are now very happy to welcome the Döhler group into a new partnership that will accelerate our organic growth through their global network and industrial capacity.”
ArchiMed managing partner Vincent Guillaumot described the HIS investment as “a carefully planned and efficient investment”.
“This first deal shows how ArchiMed adds value to healthcare companies,” he said in the statement.
“We’re less than two years out from Med 1’s fundraising close, but we should be announcing further liquidity events shortly.”
ArchiMed was set up in 2014 by Guillaumot and Denis Ribon, former members of the 3i healthcare team, and by Robin Filmer-Wilson, former healthcare partner at Barings, TCR and USS.
The fund targets mid-cap healthcare companies in western Europe with revenues of €5 million to €50 million. The firm will invest between €2 million and about €30 million in a company, with the opportunity for co-investment. Typical investments will be between €5 million and €15 million.
The firm targets four major areas of healthcare, including care and wellness, medical technology, biopharmaceuticals and public health.
ArchiMed declined to comment on how far deployed Med I is or on any plans for a successor vehicle.