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Arsenal Capital Partners acquires Cello Health

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Arsenal Capital Partners has completed the acquisition of AIM-listed healthcare consultancy Cello Health for a purchase price of £181.8m.

According to a statement, the acquisition valued each Cello share at 161 pence. The entire issued and to-be-issued share capital of Cello was valued at around £178.8m, equating to a premium of around 28.3% on the volume weighted average price per Cello Health share of 125.4 pence in the six months to 30 June 2020.

The enterprise value equates to around 12.3x Cello's adjusted 2019 EBITDA of £14.8m, according to the same statement.

Arsenal deployed equity via Arsenal Capital Partners V, which held a final close in April 2019 on $2.36bn. The fund invests in companies with enterprise values of $100-500m, deploying $50-300m in equity per acquisition.

The deal is al all-equity investment and the GP has wholly acquired the business.

Arsenal acquired healthcare communications and consultancy firm BresMed in February 2020 via Arsenal V. The GP said in a statement at the time that it planned to create a value demonstration company in the market access, health economics and outcomes research sector.

The acquisition of Cello was completed via Arsenal's holding company Value Demonstration Holdings, which will be used to build the healthcare consultancy platform with Cello forming the company's operational foundation. Jon Williams was appointed as CEO.

Arsenal plans to grow the business through continued add-on acquisitons, as well as by supporting its organic growth.

Company
Cello is a healthcare consultancy that provides advice on scientific, commercial and digitalisation projects. Its client base comprises pharmaceutical, biotechnology, diagnostics and medical devices companies.

Founded in 2004, Cello is based in London with additional locations in the US. The company employs 1,000 people and reported 2019 revenues of £107.8m.

People
Arsenal Capital Partners – Gene Gorbach (investment partner).
Cello Health – Mark Scott (CEO).
Value Demonstration Holdings – Jon Williams (CEO).

Advisers
Equity – Ropes & Gray (legal); Rothschild (corporate finance).
Company – Marriott Harrison (legal); Greenhill (corporate finance); Cenkos (corporate finance).

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