LDC seals 3x on pharma exit

The sale comes after Penn Pharmaceuticals nearly doubled its turnover last year

LDC, the mid-market private equity arm of UK-based Lloyds Banking Group, has agreed to sell pharmaceutical manufacturer Penn Pharmaceuticals for £127 million (€160 million; $215 million) to a trade buyer.

The firm took a “significant” stake in Penn back in April 2007, investing £33 million. The sale to the pharma packaging company, Packaging Coordinators, will deliver a return of almost 3x on LDC’s investment.

Headquartered in Tredegar, Wales, Penn provides contract development and manufacturing organisation to pharmaceutical and biotech companies. Penn’s annual turnover increased from £17 million to more than £30million for the financial year ended March 2014, with EBITDA up 51 percent in the same timeframe. Staff numbers have also grown significantly, and the business now employs 300 people, a 47 percent increase since LDC invested in the business.

Some of this success has been due to a 15,000 sq ft manufacturing facility Penn opened in September 2013, to enable the development and manufacture of tablets and capsules.

“The new purpose-built facility in South Wales has enabled the business to compete more effectively on a global scale, thereby driving future revenue and shareholder value,” LDC’s chief portfolio officer Candida Morley said in a statement today.

Last month LDC also sealed a 4x return, after just two years of ownership, when it sold UK internet service provider Metronet to ISIS Private Equity for £45 million.
In the past 18 months, LDC has invested over £600million of new funding, together with more than £100million of growth capital to support portfolio business acquisitions.

LDC backs UK-based companies seeking between £2m and £100m of equity for management buy-outs, institutional buy-outs or development capital transactions.
LDC were advised by Osborne Clarke and EY.