Keensight Capital says the high annual growth rate in the drug discovery CRO space helped drive the acquisition of a major stake in Symeres.
Keensight will buy a majority stake from fellow private equity (PE) firm Gilde Healthcare, adding Netherlands-headquartered small molecule drug discovery contract research organization (CRO) and contract development and manufacturing organization (CDMO) Symeres to its healthcare portfolio.
According to Amit Karna, partner at Keensight Capital, the deal – financials of which have not been disclosed – is the latest investment in the sector for his PE firm.
“Keensight identified the pharma services vertical in 2015 as a space that was exposed to secular growth trends, with segments that really fit our investment strategy,” he told Clinical Insider. “We then invested in 3 CDMOs from 2017 to 2019” – Biovan, 3P Biopharmaceuticals, and Unither.
“Drug discovery CROs are an excellent example: in this niche there are only a handful of businesses that, over decades, have built a moat around them via their expertise, track record, and client relationships, and they are serving a large, rapidly growing market.
“In addition, what makes a company like Symeres special is that they have extended their services from being a drug discovery CRO to a combined CRO with CDMO services. This is highly differentiating, and the company has been very successful with this strategy attracting clients from both the pharma and biotech segments.”
Symeres employs over 500 people at sites across the Netherlands, the Czech Republic, Finland, and Sweden, along with a business development office in the USA, and is expected to clock sales of over €70 million ($85 million) in 2021.
Keensight aims to support management in the next phase of Symeres’ growth. “Over the next five years we expect Symeres’ reputation to grow and expand, and for the company to become fully recognized as a global champion in drug discovery, development and manufacturing.”
European investor Keensight has made around 60 tech and healthcare platform investments over the last 20 years.
“The average annual growth rate of the companies we invest in has been over 20% over the past five years,” said Karna. “We support the management of these organizations in their growth plans through, among other things, our expertise, our network, our investment team & Performance team.”
Symeres fits in with Keensight’s ‘Growth Buyout’ strategy, described as “an investment in profitable, private companies experiencing strong growth, in minority or majority positions, with or without leverage, using a flexible approach tailored to the needs of individual entrepreneurs, in order to finance organic growth projects, acquisition strategies or provide historic shareholders with liquidity.
“Simply put, we invest in excellent companies, led by outstanding management teams, and help support their further growth through our knowledge, experience, network, and capital.”