3i sells Cascade stake

3i has exited its investment in pharmaceutical manufacturer Cascade Biochem through the sale of the company to Johnson Matthey. The initial purchase price of £2.75 million may be adjusted up to a maximum of £8 million, depending on the subsequent performance of the company.

The investor committed £1 million to the company in 1997 and a further £1.7 million of growth capital the following year. 3i also introduced John Burke as chairman of the company. Cascade used the capital to expand its business and facilities, which include a new purpose built product development and manufacturing facility in Cork, Ireland. The FDA approved the Cork facility in May 2001 for the production of non-sterile active pharmaceutical ingredients. Cascade also has R&D laboratories in Reading.

Cascade manufactures prostaglandins and other complex molecules that are used by the pharmaceutical industry. Prostaglandins have a variety of applications in cardiovascular, ophthalmic and gastrointestinal medicine. Headquartered in the UK, the acquirer Johnson Matthey, is a speciality chemicals company focussed on precious metals, catalysts and fine chemicals.

Despite the generally difficult exit market 3i has maintained a steady stream of realisation’s through trade sales and secondary buyouts. The company’s total realisation proceeds for the six months to end of September were £619 million, generating net realised profits of £118 million over opening valuation.