UK-based contract research organisation (CRO) Chiltern International says it is in better shape for continued growth after a private-equity backer exited the business, leaving a consolidated investor base.
The new ownership structure puts Chiltern in the hands of existing investors led by interests associated with New Zealand-born businessman Sir Douglas Myers.
A consolidated investor base “enables Chiltern to continue to deliver on its strategic plan for growth while maintaining its focus on the delivery of high quality, innovative clinical trial services and therapeutic expertise”, the company stated.
Kester Capital has sold its interest in Chiltern in a deal valuing the business at £135 million. The move generated a return of more than two times capital and a 25% internal rate of return for Kester Capital funds.
No other financial details were released. Operating as Greenhill Capital Partners Europe, Kester acquired its stake in Chiltern for an undisclosed sum January 2010.
The interest was sold by one of the investors who had backed the management buy-in of Chiltern in 2006. This involved a team led by then executive chairman Nick Thornton and chief executive officer Glenn Kerkhof, who stepped down in October 2012.
Adam Maidment, partner at Kester Capital, said Chiltern had been “a great asset for us; it is a first-rate business with an excellent reputation and we wish the management team led by Nick Thornton and Jim Esinhart the very best for the future”.
Access to investment
According to Chiltern, the consolidated ownership improves the company’s access to new investment that can help take the business forward.
“It will provide Chiltern with the means to expand further and develop within key target markets, both organically and through investment in people, technology and client relationships, as well as external opportunities to optimise Chiltern’s mid-tier leadership position through carefully targeted acquisitions,” the CRO explained.
Demand for Chiltern's services is “at an all-time high”, the CRO noted.
A record financial performance in the year ended 31 March 2013 saw top-line growth of 16.8% to £104 million, taking compound annual growth in revenues to 15.3% for 2008-2013.
Earnings before interest, taxes, depreciation and amortisation – excluding exceptional items, minority interest and foreign-exchange effects – were £14.9 million, 33% ahead of the year to March 2012 and generating a compound annual growth rate of 19.2% for the last five years.
“The new investment will allow Chiltern to maintain this substantial growth and to continue to drive the Company forward,” the CRO added.
Earlier this year, there were rumours in the press that Chiltern might be up for sale as the CRO sought a substantial investor to help expand and differentiate the business.