Capiton raises top-up single asset fund for KD Pharma

Harriet Matthews
28 July 2021

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Capiton has closed a top-up single asset fund for KD Pharma, two years after the GP completed its first single-asset deal for the Germany-based omega-3 food and pharmaceutical supplements producer.

The top-up fund was raised in three months, Capiton said in a statement, and the deal was highly oversubscribed with the backing of the company's existing investors.

In addition to Capiton, Pantheon Ventures and Aberdeen Standard Investments are shareholders in the business, having participated in the first single-asset deal for the company. Netherlands-based Bioseutica owns the remaining 15% stake in the company.

The GP acquired KD Pharma via its fourth flagship fund in May 2013. Capiton IV held a final close in November 2009 on EUR 350m and made nine platform investments.

Capiton raised its first single-asset fund for KD Pharma in 2019 – as reported by Unquote – with the aim of extending its investment period and securing additional capital. Park Hill advised on the process, as reported.

The new deal is intended to provide equity for strategic investments, including add-ons and organic growth initiatives. The company intends to expand its portfolio to related markets including the cannabinoid market and small-molecule synthesis.

Bexbach-headquartered KD Pharma now posts revenues of around EUR 200m, Capiton said in a statement.

A source close to the situation told Unquote in March 2021 that KD Pharma has a strong add-on pipeline. The company has made two bolt-ons in 2021, the latest of which was the acquisition of he manufacturing assets of an undisclosed Switzerland-based cannabinoid manufacturer.

Capiton is expected to hold a final close for its sixth flagship fund in summer 2021, as reported. The fund has a target of EUR 550m and will follow the investment strategy of its predecessor vehicles, focusing on mid-market primary buyouts in the DACH region and deploying equity tickets of EUR 20m-50m. The fund expects to make 15 platform deals in total and has made five so far, the latest of which was PVC window frame machinery producer Stürtz Group.

The GP focuses on medical technology, pharmaceuticals, industrial technology, and responsible consumption businesses.

Capiton was advised on the top-up deal for KD Pharma by CMS, which provided asset-level legal advice, while Poellath advised at fund level. EY advised on tax, while BMH Bräutigam acted as notary. KD Pharma's investors were advised by Debevoise & Plimpton.