Rothschild healthcare exit may reach 10x

The Paris-based firm, which invested $10m in Vessix Vascular in June 2011, has exited the business, generating an initial 3.5x return multiple that could increase up to 10x in the next three years.

Edmond de Rothschild Investment Partners has sold medical technology business Vessix Vascular for up to $425 million to Boston Scientific, after investing only $10 million in the company last year, it said in a statement.

The firm acquired a 20 percent stake in June 2011 using its €155 million BioDiscovery Fund III, a 2008 vintage.

As part of the deal, Boston Scientific paid $125 million in cash, giving Rothschild a return multiple of 3x. This return can increase up to 10x in the next three years depending on whether certain sales targets will be achieved. 

Vessix Vascular is a medical technology company which develops radiofrequency balloon catheter technology for the treatment of uncontrolled hypertension. There are approximately 1 billion people worldwide that suffer from this condition, which is a major risk factor for heart diseases and strokes, according to the company’s website.  

Edmond de Rothschild Investment Partners, which is a private equity division of the LCF Rothschild Group, led the company’s $25 million series of B financing in June 2011. The funds were used to develop Vessix Vascular and to start a clinical trial, which has launched in more than 20 centres in Europe, Australia and New Zealand.

The Vessix Vascular sale marks the second exit of the firm’s BioDiscovery Fund III, which is fully invested. There are 12 companies left in this fund, the firm said. Edmond de Rothschild Investment Partners is raising its fourth BioDiscovery fund, which will target €180 million to €200 million, according to Private Equity International’s in-house database. In July, the fund reached a first close on €125 million.