European healthcare investment firm ArchiMed SAS has agreed to acquire a majority state in medical device testing company Namsa, the two businesses said.

ArchiMed prevailed in a sales process for the business, also known as North American Science Associates, over three other private equity firms with a bid of just over $350m, a person familiar with the sales process said.

The current owners of Namsa, primarily the founding Gorski family, will hold about 30% of the equity following ArchiMed’s investment, the person added.

Based in Northwood, Ohio, with 12 offices globally, Namsa performs contract research and testing of medical devices, according to a news release. The company works with medical device makers, pharmaceutical companies and others to oversee the development of medical devices from the original concept through commercialisation, including the process of securing regulatory approval.

The company is led by chief executive John Gorski, whose father founded Namsa in 1967. The sale to ArchiMed includes equity incentives for the Gorski family and the rest of the management team that can be triggered based on the company’s performance, the person with knowledge of the deal said.

ArchiMed, based in Lyon, France, invests in healthcare companies in Europe and North America.

The firm recently announced it closed its MED Platform I fund, a “buy-and-build” midcap-focused fund, at €1bn, about 25% more than the firm targeted for the vehicle. That fund invests between €50m and €500m per deal and ArchiMed expects to make about a half dozen deals in total from the fund. ArchiMed also has raised two funds focused on smaller deals.

Namsa, which originally went on the market last year, was on the verge of being sold to a different private equity firm when the coronavirus pandemic hit and the sale was put on hold, the person familiar with the sales process said.

In the second sales process, two other private equity firms made higher bids than ArchiMed, the person said. The company chose ArchiMed in part because of its knowledge of the European market, one of the areas where Namsa hopes to expand, the person added.

The deal is expected to close in September.

It is the third deal from ArchiMed’s new fund. The previous acquisitions from the new vehicle were Bomi Group, an Italian medical logistics company the firm took private last year, and Direct Healthcare Group, which manufactures devices for patients with reduced mobility.

Source: Wall Street Journal

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