Bloomberg News

Labco Said Set for Sale by 3i as Blackstone Circles Firm

July 10, 2012

Labco SAS, a medical-diagnostics company whose investors include 3i Group Plc (III), is seeking buyers after it was approached by private equity firms including Blackstone Group LP (BX:US), said people with knowledge with the situation.

3i, Britain’s oldest private-equity firm, decided to organize a formal process beginning in September to sell Labco after being approached by a bidder a few weeks ago, the people said. Private equity firms including EQT Partners AB, Bain Capital LLC and TowerBrook Capital Partners LP may also be interested in Labco, people said.

Labco may be valued at about 1 billion euros ($1.23 billion), two of the people said. Labco has annual earnings before interest, taxes, depreciation and amortization, or Ebitda, of about 130 million euros, one of the people said. The company’s first-quarter earnings rose 19 percent to 31 million euros compared to 26 million euros for the same period a year before, according to a financial statement.

Labco, based in Paris, operates more than 250 laboratories in six European countries, according to its website. The company provides a range of more than 2,500 tests, such as blood analyses, thyroid tests, microbiology cultures and HIV tests, as well as specialty tests such as oncology and paternity testing. It employs about 4,500 people, including 500 pathologists, its website says.

Unsolicited Approaches

The company in 2011 sold 500 million euros of 8.5 percent notes maturing in 2018, which include a change of control clause, according to data compiled by Bloomberg. Labco confirmed on June 27 it had received unsolicited approaches. Fitch Ratings said two days later that bids probably came from private equity firms, and that it would consider a rating action on Labco’s bonds if the offers become more binding.

Caroline Sueur, a Labco spokeswoman in Paris, said the company won’t make any additional comment beyond what it said in its June 27 statement.

Officials at 3i, Blackstone and TowerBrook declined to comment. Officials at EQT and Bain did not respond to requests for comment.

3i, which invested 130 million euros in Labco in several tranches since July 2008 and syndicated 15 million euros, owns close to 20 percent of the company, according to the 3i website. Labco’s management and laboratory doctors are also major shareholders, according to the company’s website.

Ownership Structure

At the end of March, financial investors including 3i owned 42 percent of Labco, while laboratory doctors held 20 percent, according to a financial statement. Other shareholders such as management held 19 percent and the the company’s founders held 18 percent.

Founded in Paris in 2002, Labco has made 80 acquisitions since 2008, according to 3i.

Started just after World War II, 3i was one of the first private-equity firms in Europe. After going public in London in 1994, it expanded in Asia and targeted bigger transactions. The 2008 credit crisis halted the firm’s expansion. 3i said last month it plans to cut more than a third of its workforce and shut offices in Hong Kong and Shanghai in an attempt to revive profit.

To contact the reporters on this story: Francois de Beaupuy in Paris at fdebeaupuy@bloomberg.net; Albertina Torsoli in Geneva at atorsoli@bloomberg.net

To contact the editor responsible for this story: Jacqueline Simmons at jackiem@bloomberg.net


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