DxS sold in £80m deal
MANCHESTER diagnostics specialist DxS has been sold to a Dutch group in a multi-million pound deal.
Qiagen, a quoted sampling and testing business, has paid £58m in cash for DxS with a further £21.4m due in performance-related payments.
The deal rewards DxS’s management team and its backers, a syndicate led by NVM Private Equity.
NVM’s Manchester office has invested some £3m since DxS was established in 2001. It held around 50% as part of a syndicate which includes YFM and Hygea.
NVM described the deal as a “record exit” giving it a return of 13 times its original investment.
DxS was launched by two AstraZeneca scientists, Dr Stephen Little and Dr David Whitcombe. Employing around 75 staff it specialises in kits that make it easier for doctors to prescribe the most effective treatments for various forms of cancer.
In July Dr Little, pictured, told TheBusinessDesk that DxS had achieved sales of £11.5m and was looking at either a trade sale or a flotation. “We will do one of them,” he said. The firm has already signed several key distribution deals, including one with the drugs giant Roche.
The business, which has its own manufacturing facility in Manchester, produces around 50,000 testing kits a year. That figure is expected to double in 2010.
Dr Little said: “Qiagen is the ideal partner for DxS to roll out our assays globally, to take our partnerships to the next level and to take a leadership position in companion diagnostics.”
Qiagen, which spun out of the University of Dusseldorf in 1984, said it would benefit from DxS’s “deep pipeline” of active or planned companion diagnostic partnerships in oncology with many of the leading pharmaceutical companies.
Clive Austin, who heads NVM’s Manchester office and sat on DxS’s board, said: “We are delighted with the outcome at DxS. Our investment in DxS has been an outstanding success for NVM and its funds. It is a perfect example of the rewards of sticking with a good team in a promising market, of following our investment and having a flexible approach to exit.”
Qiagen plans to establish DxS’s headquarters in Manchester as a Centre of Excellence in “Pharma Partnering”. It also said it expects to expand the Manchester site.
DxS and its shareholders were advised on the deal by Osborne Clarke. Qiagen was advised by Morrison & Foerster. Jeffries acted as its financial advisor.
