F&C Ventures returned a multiple of eight times the cost of the institutional investment when it sold provider of home healthcare, Clinovia to LVL Médical Groupe SA, a pan-European home healthcare group, based in France.
Clinovia provides home infusion therapy products and services. F&C Ventures initial and sole investment of £2.3 million in the company, that was formerly named Caremark, was made in September 1998 in a management buyout/buy-in from its US parent, MedPartners. The realisation proceeds represent eight times the cost of the institutional investment and an internal rate of return of over 250%.
LVL has bought out 95% of the capital of Clinovia. With a view to helping the development of the group in the UK, Clinovia management retains 5% of capital. Shareholders benefit from an earnings enhancing effect of a minimum of FF12 million consolidated net profit for the current fiscal year.
Stephen Cavell, a director of F&C Ventures stated that the management team of Clinovia were happy to become part of LVL, who acted quickly and at an appropriate price. For LVL, the acquisition fits in with its plans for European expansion and penetration of the home infusion market in the UK. As one of the initiators and developers of the home infusion concept in the UK, Clinovia was able to create a privileged relationship with the regulatory authorities and benefits from a competitive advantage in terms of experience and credibility with a 65 per cent market share. The acquisition has increased LVL’s activity in the sector significantly, with home infusion now representing around 42 per cent of total turnover, compared to 3 per cent in the last fiscal year.
Cavell said of the sale: “We are delighted by the return generated from this investment. We believe that the successful sale is attributable to the turnaround of the company by the management team in the past two years and Clinovia is a good fit for LVL Médical.” He added that Clinovia managed to repay the loan stock very early on, enabling a quick, smooth exit.