Bloomberg News

3i’s Labco Said to Draw Bids From Blackstone and PAI

November 13, 2012

Labco SA, a medical-diagnostics company whose investors include 3i Group Plc, has drawn preliminary bids from private equity groups Blackstone Group LP (BX:US) and PAI Partners SAS, said people with knowledge of the matter.

Buyout firms EQT Partners AB, Bain Capital Ltd., Advent International Corp., TowerBrook Capital Partners LP, also made non-binding offers, one of the people said. Groupe Bruxelles Lambert SA (GBLB), the investment firm controlled by Albert Frere and Paul Desmarais, and Swiss laboratory operator Unilabs SA, partly owned by Apax Partners LLP, also bid, the person said.

Labco’s owners are seeking as much as 1 billion euros ($1.27 billion) from a sale, one of the people said. The Paris- based company, which employs about 4,500 people, provides more than 2,500 diagnostics such as blood analyzes, thyroid tests, microbiology cultures and HIV tests, its website said. Labco operates more than 250 laboratories in Europe and also offers specialty services for oncology and paternity testing.

A spokeswoman for Labco wasn’t immediately available to comment on a sale. Officials at 3i, Apax, EQT, and TowerBrook declined to comment. Officials at Bain, Blackstone, PAI, Advent and Groupe Bruxelles Lambert were not immediately available for comment.

The company’s first-half earnings before interest, taxes, depreciation and amortization rose 19 percent from a year earlier to 62 million euros, according to a financial statement.

Last year, the company sold 500 million euros of 8.5 percent notes maturing in 2018, which contain a change of control clause, according to data compiled by Bloomberg.

Unsolicited Approaches

Labco said on June 27 that it received unsolicited approaches. Fitch Ratings said two days later that bids probably came from buyout firm and that it would consider a rating action on Labco’s bonds if the offers were binding.

3i (III), which has invested 130 million euros in Labco in several tranches since July 2008, owns close to 20 percent of the company, according to the buyout firm’s website.

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

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

Created 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 in June that 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; Chris V. Nicholson in Paris at cnicholson22@bloomberg.net

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


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