One of the largest companies on London’s Aim secondary market is the latest British business to fall to raiders from the deep-pocketed private equity community.
Clinigen, a drugs company best known for its Proleukin cancer treatment, said it had agreed to a £1.2 billion cash takeover by Triton Investment Management, a European firm specialising in mid-market industrial technology and healthcare companies.
The 883p-a-share offer was touted as a 40 per cent-plus premium to where the shares were trading before news first emerged of Triton’s interest at the beginning of this month. In reality, the offer values Clinigen not much above where it was trading before a warning in June that demand for Proleukin had reduced and which subsequently devastated the share price.
Shares in Clinigen are widely held among UK and international institutions though in recent months, the aggressive US activist Elliott Management had also appeared on the register with a holding of more than 7 per cent.
Triton, which has €15 billion under management and is invested in 48 companies across Europe, primarily in German-speaking jurisdictions, said it believed Clinigen had a better future away from the glare of the public markets.
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Analysts have been arguing for months that the company’s reputation had been atrophying because of cumulative earnings downgrades but that there was plenty of unlocked potential with the right strategy and/or the right backer. After its big profit warning in the summer, the broker Liberum said: “There is significant value here. It just needs to be extracted. It has under-performed, it’s not broken.”
The crisis at the company became evident at the end of the summer when the financial director and the chairman quit within days of each other.
Based at Burton-on-Trent, Clinigen was formed via a three-way merger in 2010 and floated on the Aim exchange two years later, the first pharma company to list since before the banking crisis and global financial crisis.
Its big expansion came with the £150 million takeover of Quantum Pharma in 2017, at which point Clinigen’s architect Peter George left the company. By this year it was employing 1,200 people around the world and reporting operating earnings of £116 million on income of £458 million.
Clinigen is another notch for international private equity in the takeover of listed UK companies since the Brexit referendum. Morrisons, the supermarket group, has fallen prey as has Cobham, the aerospace group, Aggreko, the power business, Signature Aviation, and the infrastructure firm John Laing. The takeover of the G4S security empire was also private equity backed.
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Triton was founded in 1997 by Peder Prahl, a former Doughty Hanson deal-doer.
Clinigen’s board said that it believes the group has a rosy future but conceded: “It also recognises that uncertainties exist, many of which are beyond Clinigen’s control.”
