Maven reaps 4.7x on Crawford Scientific sale to Limerston

The sale generated a 4.7x return for the vendor after a three-year holding period, equivalent to an IRR of 70%.

Financial details of the transaction remain undisclosed, though Limerston typically makes majority investments in companies with EBITDA of £4-10m that can benefit from operational improvement or in companies with EBITDA of £1-2m that operate in fragmented sectors offering consolidation opportunities. According to publicly available documents, Crawford generated an operating profit of £2.1m in the year ending in September 2016.

The acquirer is currently investing from its maiden fund, which held a final close in excess of its £200m target in August this year. The Crawford deal is the third investment by the vehicle, following the acquisitions of domestic electricity and gas supplier Spark Energy in August 2016 and HR software and consultancy company AdviserPlus in November 2016.

Under the vendor's tenure, Crawford undertook an international expansion strategy with a particular focus on the US, Chinese and continental European markets, and bolted on Manchester-based Hall Analytical Laboratories. It also expanded its operations into the electronic cigarette testing market.

According to a statement, the business has doubled its turnover and headcount during the three-year investment period, with profitability trebling.

Under its new owners, Crawford will seek to capitalise on the growing trend of outsourced testing, primarily in the pharmaceuticals industry. It will also look to expand into new market segments.

Previous funding
Maven invested £3.9m in Crawford in August 2014, stating at the time it was attracted by the $7.4bn value of the chromatography industry, which it predicted will increase by 4-6% per year.

The GP then provided the business with a further £2.2m to fund the acquisition of Hall Analytical.

Company
Based in Strathaven, Scotland, and founded in 1985, Crawford is a provider of chromatography consumables, instrument parts and technical services to laboratories. It serves a range of industries including the oil & gas and pharmaceutical sectors. The consolidated group generated turnover of £13.6m in the year ending in September 2016, according to the aforementioned documents.

People
Maven Capital Partners – David Milroy, Alan Robertson (investment directors).
Limerston Capital Partners – Joao Rosa (founding partner).
Crawford Scientific – Sam Crawford (managing director).

Advisers
Equity – Weil Gotshal & Manges (legal); KPMG (financial due diligence); BDO (corporate finance); CIL (commercial due diligence).
Vendor – Mazars (corporate finance).
Company – Strata Partners (corporate finance); Burness Paull (legal).
Management – Brodies (legal); Rob Ferguson Chartered Accountants (tax).

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