Private equity firm backs biotech MBO
The management of biotech business YorkTest Laboratories has signed an £8.6m deal with Key Capital Partners to support their buyout.
The Leeds-based private equity house has backed the management team of YorkTest in completing an MBO, which sees CBPE Capital sell 100% of its stake in the testing business.
The deal sees KCP acquire a majority stake in the business, backing the incumbent management team of Rachel Jansen, CEO; Neil Guilder, CFO; Dr Gill Hart, scientific director; and Jonathan Brookes, operations director.
The company, based at York Science Park, specialises in food intolerance testing, and trades as YorkTest and Lorisian. Last year it turned over £3.7m and made just over £855,000 in pre-tax profits.
It aims to combat addressing ailments such as IBS, migraines and skin conditions with a finger-prick blood test.
YorkTest’s sales are currently direct to the customer via recommendations and through its website, sales are now growing through its Lorisian brand to a series of partners
YorkTest managing director Rachel Jansen said: “We are immensely proud of the service we have developed over the years, and the impact our services have to improve the health and lives of many people every year.
“With 45% of people suffering symptoms of food intolerance, and three out of four people reporting feeling a benefit within four weeks of starting one of our dietary change programmes, we are only just scratching the surface of this huge issue.
She continued: “We were looking for a partner to help us continue to build on the brand equity, continue to add complementary products and scale up to take advantage of the market opportunity in front of us, on a global basis. KCP see the same opportunities that we do, they bought into our customer engagement programme and fully supported our plans to grow and develop the business and provide food intolerance sufferers with a well-established, proven solution.”
James Hall, partner at KCP, who led the investment team alongside Seb Wilkinson, will join the board of YorkTest.
Hall said: “This is a long-established business with a proven track-record and reputation for quality in the food intolerance testing market, and we see huge potential for growth both directly to consumers as well as continued expansion into the business to business channel.
“The firm’s success lies in its unique service and delivery model, as well as the quality and reproducibility of its scientific processes.”
KCP was supported on the transaction by: Addleshaw Goddard as lawyers; BDO on financial due diligence; CIL on commercial due diligence; Hendersons on insurance; Intuitus on IT; and PwC on tax. CBPE Capital was advised by Strata Partners LLP and DWF LLP. The YorkTest management team was advised by Walker Morris.
Leeds-based KCP is an investor in the smaller buy-out market making investments of £3m-£15m in profitable growing companies, and in 2015 launched its latest £70m fund focused on making investments into high growth businesses across the UK. This investment is KCP’s fourth out of the current fund and the third in the last three months.
Pictured: Seb Wilkinson of Key Capital Partners; Neil Guilder, CFO of YorkTest Laboratories; Rachel Jansen, CEO of YorkTest Laboratories; and James Hall of Key Capital Partners
