JLL Partners poised for 60-plus-pct IRR on Patheon exit

  • JLL acquired 51 pct stake in Patheon in 2014
  • Most of firm’s equity came from Fund VI
  • Deal values Patheon at $3.8 bln

JLL Partners stands to make 4x to 5x its investment in Patheon NV, according to a source with knowledge of the deal.

Thermo Fisher Scientific is expected to close its acquisition of the drug-manufacturing business in the next three to five months.

The New York private equity firm is telling its limited partners that the deal, agreed to Monday, could gross JLL and its co-investors an internal rate of return “north of 60 percent,” said the source. Patheon is valued at around $3.8 billion, Bloomberg reported over the weekend.

JLL Partners’ Dutch food and chemicals group Royal DSM in 2014 took Patheon private in a deal that valued the then-public company at around $1.4 billion. Patheon was merged with Royal DSM’s pharmaceutical unit. JLL-controlled funds held a 51 percent stake in the merged entity upon the deal’s close.

The firm invested in Patheon through its fifth and sixth flagship buyout funds, with around 80 percent of its equity coming from Fund VI. As of Dec. 31, Fund VI was netting a 2x multiple on invested capital and 23.6 IRR since its inception in 2009, the source said. Fund V, a 2005 vintage fund, was netting a 1.6x and 9.7 IRR as of that date.

JLL’s healthcare-asset portfolio also includes American Dental Partners, which manages dental practices; medical-device business MedPlast and for-profit-hospital manager Iasis Healthcare.

The firm was founded in 1988 and specializes in midsized buyouts. JLL Partners closed its most recent fund on $1 billion last year.

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Medicines on a shelf are seen through the window of a pharmacy in Tokyo on Dec. 20, 2016. Photo courtesy Reuters/Kim Kyung-Hoon