PE Firm Investindustrial Gears Up for Possible $1.2bn Lifebrain Sale

Private equity firm Investindustrial is working with banks on a possible sale of Italian laboratory diagnostics firm Lifebrain in a deal that could value the COVID-19 test supplier at more than $1.2bn, four sources told Reuters.

Investindustrial, advised by JPMorgan and Goldman Sachs, has been approached by interested parties in recent months and could decide to launch an auction process as soon as May, according to the banking sources.

Rome-based Lifebrain focuses on routine and speciality laboratory tests, including COVID-19 ones, and operates through about 360 laboratories in Italy.

Private equity firm EQT, which controls French medical laboratory services operator Cerba HealthCare, is among a series of investors expected to submit an offer when the auction starts, two of the sources said.

Investindustrial declined to comment while EQT was not immediately available to comment.

Investindustrial has ploughed around $847m into Lifebrain since it first invested in 2018, doubling the company’s core earnings and boosting its efforts to diversify into non-clinical environmental and food testing, one of the sources said.

The investment firm, led by Andrea Bonomi, expects Lifebrain’s EBITDA to increase to more than $121m in 2021 from about $48-61m in 2019, following a series of bolt-on acquisitions and a push to expand the business overseas, the sources said.

Lifebrain, co-founded in 2013 by Austrian professors Michael Havel and Bernhard Auer, is expected to fetch a multiple of 12 to 15 times its 2021 core earnings, one of the sources said, pointing to high industry multiples applied to similar deals including Synlab’s sale of its Analytics & Services unit to SGS in November.

If it goes ahead, the sale would add to a wave of deal-making in the sector as investors are increasingly placing their bets on pandemic-proof assets.

Earlier this month U.S. laboratory products supplier Avantor agreed to buy German peer Ritter for $1bn in cash, while Roche acquired U.S.-based GenMark Diagnostics. Lab services group Synlab is about to make its stock market debut in Frankfurt.

Source: Reuters

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