Leonard Green in $270m exit

Two and a half years after investing $100m into Phoenix Scientific, the Los Angeles private equity firm has agreed to sell the manufacturer of animal pharmaceuticals for approximately $270m in cash and stock to industry player IVAX.

Los Angeles-based private equity firm Leonard Green & Partners has agreed to sell Phoenix Scientific, a manufacturer of generic drugs for animals, to publicly-traded generic pharmaceutical company IVAX Corporation in a transaction valued at approximately $272 million (€209 million) in cash and stock.

Under the terms of the transaction, expected to close in the second quarter, stockholders of Phoenix Scientific will receive $196.85 million in cash and $75 million in IVAX stock.

Leonard Green acquired Phoenix Scientific in 2002, investing approximately $100 million of capital in a deal reportedly valued between $275 million and $300 million.

Leonard Green has been an active investor in the animal-health industry, having previously acquired two different companies, pet supply retailer Petco and veterinary hospital VCA Antech, in 2000. The private equity firm exited both of those investments in 2004 via public stock sales, generating 6 times their initial $190 million investment in Petco, along with co-investor Texas Pacific Group, and more than 3 times its equity commitment of $100 million in VCA Antech.

The investment in all three animal-health companies came from Green Equity Investors III, a $1.2 billion fund that closed in 1998.

Leonard Green & Partners was founded in 1989 by Leonard Green, who passed away in October 2002. The firm is now run by three managing partners:  John Danhakl, Peter Nolan and Jonathan Sokoloff. Leonard Green is currently investing Green Equity Investors IV, a $1.85 billion fund that closed in 2003.