Deal in focus: VC-backed Okapi sold to US biopharma Aratana

Aratana purchased Okapi from its consortium of venture capital backers for a total consideration of up to €33.3m this January. The deal came about from the existing relationship between Harrold van Barlingen, a partner at Okapi backer Thuja Capital, and the CEO of Aratana, Steven St Peter, who used to be a venture capitalist himself.

The sale of Okapi highlights the importance of establishing and maintaining relationships across the board in the venture capital world. "I knew the CEO of Aratana from his work at MPM Capital," says van Barlingen. "I made sure that both companies met after it became clear that he [St Peter] was to become CEO."

Prior to taking up the position of CEO at Aratana, St Peter worked as a managing director at MPM Capital, a US-based, life sciences-focused venture capital firm that has invested in Aratana – a deal that St Peter himself led while at the firm.

The offer to acquire Okapi by Aratana comprises a €10.3m cash payment, an €11m promissory note maturing in December 2014 and a further €12m in cash or common stock, to be paid within 90 days.

Following the introductions made by van Barlingen between Okapi CEO Erwin Blomsma (pictured) and Aratana CEO St Peter, the parties interacted for around nine months before the deal came to fruition, says van Barlingen.

Thuja is a founding investor in Okapi, providing the company with seed funding and subsequently building an investor syndicate for a larger, later-stage round.

In November 2008, Okapi received €8.5m in funding from a large syndicate of investors comprising Thuja, PMV, Spinventure (the €1m seed capital fund of University of Liège), Neon Private Equity, KBC Private Equity, Agri Investment Fund, Fortis Bank and KU Leuven, according to unquote" data.

Thuja backed the company via its Thuja Capital Healthcare Fund I vehicle. The firm held an approximate 15% stake in the company at the time of the sale to Aratana.

Despite the fact that Okapi received only one large round of funding from its investor base, van Barlingen says that Thuja played an important part in the company's progress: "We were material in building the company's board and scientific advisory board. We also supported the company in maturing its internal standards and recruiting the right people."

Founded in 2007 and headquartered in Leuven, Okapi develops antiviral drugs for pets, including treatments for feline herpes and immunodeficiency virus, as well as oncology treatments for cats and dogs.

Kansas-based Aratana listed on the Nasdaq in June last year, pricing its stock at $6 per share and raising a total of $39.67m. Shares jumped to almost $30 apiece in October last year when the firm announced its acquisition of Vet Therapeutics, a San Diego-based biologics company.

Following the announcement of the acquisition of Okapi, Aratana's market cap sits at around $468m.

Okapi's CEO and co-founder Blomsma will become vice president at Aratana, as well as general manager of Okapi, following the takeover.

People
Thuja Capital – Harrold van Barlingen

Advisers
Vendor (Thuja) – Eubelius (Legal); Deloitte (Tax).

This deal was originally covered on 7 January 2014.

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