Healthcare investor GHO Capital Partners has acquired US-based DNA Diagnostics Centre, its first investment from its debut fund.
The London-based firm is acquiring the company, which provides private DNA testing services with operations in the US and the UK, for an enterprise value of €104 million, it said. The company employs 245 staff and processes 750,000 tests a year.
GHO plans to expand the company within Europe. “What got us excited about it was it is niche, a scale player in providing testing, it has a London base from where it can grow its international presence and we saw the opportunity to grow that business both in term of geography and products that it offers,” GHO executive partner Mark Braganza told Private Equity International.
The company offers DNA testing for paternity, family relationships, forensics, cell line authentication and ancestry through its trademarked Dual Process, GHO said.
The investment was made out of GHO’s first fund, which is currently in market targeting €500 million. GHO Capital I has collected €400 million so far, according to PEI Research & Analytics.
Braganza declined to comment on the fundraising, but noted the firm has a pipeline of transactions.
GHO is focused on mid-market healthcare companies of €100 million to €400 million, typically in Europe, that it can internationalise. The fund expects to make eight to 10 investments.
“We are interested in businesses that have a proven product, model or service that they are offering locally and have an ambitious management team that wants to build a pan-European franchise,” Braganza said.
The “harmonisation” of healthcare regulation in Europe provided a “great backdrop for PE to help small and mid-sized healthcare companies to build real businesses and franchises,” he noted.
There are lots of companies in the market that “want to get to the next level” and the firm is “finding a lot of people want to talk to us about their strategy.”
The firm is looking for opportunities that fit its skill-set, noted Braganza, who is a qualified doctor and formerly part of the TPG healthcare investment team, a biotechnology executive, and a healthcare, pharmaceuticals and biotechnology consultant.
GHO was founded in 2014 by executive partners Alan MacKay who was senior partner and global head of healthcare at 3i; Mike Mortimer who was most recently executive vice president at clinical trial multinational Quintiles; and Andrea Ponti, who was an investment banker at both JP Morgan and Goldman Sachs, where he developed their European healthcare businesses, according to GHO’s website.