NorthEdge sells DHG to ArchiMed for 3x return
NorthEdge has sold a majority stake in Direct Healthcare Group (DHG) in a secondary buyout to ArchiMed, generating 3x returns.
NorthEdge secured an IRR of 39% on the sale.
During NorthEdge's holding period, the company made bolt-ons such as Nightingale, Kirton and Qbitus. In addition, revenues more than doubled and EBITDA more than tripled, according to a statement.
ArchiMed, a healthcare focused investor, drew equity from its Med Platform I fund, which held a first close on €530m in October 2018. The fund makes investments of €50-300m.
Under ArchiMed's ownership, DHG is expected to continue to target strategic acquisitions, particularly in Europe. The firm has committed a significant amount to fund future acquisitions, with the total commitment representing more than double DHG's enterprise value, according to a statement.
Previous funding
NorthEdge acquired a majority stake in the company in April 2016, drawing equity from its NorthEdge Capital Fund I. The fund closed on £225m in 2013 and typically made investments of £5-35m in businesses.
Company
DHG develops and manufactures a range of pressure care products designed to prevent medical issues such as pressure sores. Founded in 2009, the business employs 185 people across its sites in the UK, including its headquarters in Caerphilly. The company generated revenues of £22.37m, £3.02m EBIT and £4.28m EBITDA for the year ending in March 2019, according to publicly available documents.
People
ArchiMed – Antoine Faguer (partner).
NorthEdge – Andrew Skinner (investment director).
Direct Healthcare Group – Graham Ewart (CEO).
Advisers
Equity – KPMG (corporate finance, financial due diligence, tax); Candesic (commercial due diligence); Dechert (legal).
Vendor – PwC, Dan Gallagher, Ian Birch (corporate finance); Addleshaw Goddard, Paul Meddlicot (legal); KPMG, Simon Wormald, (financial due diligence); CIL, Giles Johnson (commercial due diligence).
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