PPM exits Oxoid in £177m trade sale

European mid-market investor PPM Ventures has reported an IRR of 33 percent on the UK healthcare business it acquired from Cinven in 2000.

PPM Ventures, the private equity business of UK insurance group Prudential plc, has completed its second transaction of the year, selling microbiology products supplier Oxoid to US trade buyer Fisher Scientific International.

Oxoid, based in Basingstoke, specialises in the manufacture of diagnostic products for the microbiology market, while Fisher, listed on the New York Stock Exchange, is a provider of equipment supplies and services to global scientific research markets.

 

PPM originally acquired Oxoid in 2000 through a secondary buyout from Cinven in a deal worth £100 million ($186 million; €147 million). PPM backed the existing management team led by Mike Smith, chief executive, who will remain with the business following Fisher’s acquisition.

 

PPM Ventures had initially planned to float the business, and had hired Cazenove to advise on plans for a UK listing. “We had been working on an IPO for the business with Cazenove since the Autumn,” said Sally Flanagan, an investment director at PPM. “We received an unsolicited approach for the business before Christmas and things have moved very quickly since then.”

 

“We were confident of Oxoid’s flotation prospects. Cazenove gave us a positive view and we were also aware of the fact that there are not many mid-market healthcare stocks,” added Flanagan.

 

During PPM’s three-year ownership, Oxoid has achieved significant organic growth in sales and profits. The business is currently building a new 40,000 sq ft facility in Scotland, and has expanded international operations through the acquisition of a manufacturing plant in Australia.

 

The sale to Fisher provided PPM with a return of 2.75 times money invested – equivalent to an IRR of approximately 33 percent.

 

In January 2004, PPM announced the $575 million acquisition of the diagnostics business of Pfizer, the US based pharmaceutical corporation. This business, based in Uppsala, Sweden, specialises in the development, manufacture and marketing of complete blood systems to support the clinical diagnosis and monitoring of allergy, asthma and autoimmune diseases.