EQT to take SPT Labtech on 'growth journey' after secondary buyout

Min Ho
23 June 2022

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EQT Private Equity will acquire SPT Labtech from Battery Ventures in a deal that values the UK-based laboratory automation solutions provider at GBP 650m; the new owner plans to accelerate the companyтs growth journey, according to a press release.

SPT will form part of EQT IX fund, which raised EUR 15.6bn in April 2020. Following this transaction, the fund is expected to be 85%-90% invested, according to the press release.

The company is a leader in market niches such as the low-throughput liquid handling market, with expected future market growth of 9%-10% CAGR.

According to a source familiar with the situation, the new owner plans to expand the company across its products and geographic presence, including via acquisitions. One key growth pillar will be to expand its existing products that plays into megatrends, such as increasing automation in smaller research labs, miniaturization, and a broader adoption of the multiomic biological analysis approach.

Another growth priority will be "doubling down" on the APAC region, an area where the company is already present following its acquisition of Chinese contract distributor LBD Life Sciences in 2020, but where white spaces still exist, the source said.

SPT will also continue to look at product innovation and expansion into adjacent markets, among which the clinic diagnostics market shows the most significant growth potential. Unlike the research market, diagnostic laboratories require different regulatory approvals and certifications, which makes it a large and attractive market, the source said. Other adjacent products could also include reagent specialists, which can be easily integrated into the company.

Since the company's spin out from TTP Group in 1997 and the acquisition by Battery Ventures in 2018, SPT embarked on an acquisition spree that included Germany's Quantifoil Micro and California-based Apricot Designs and BioMicroLab.

Mergermarket reported in May that SPT was being marketed at around GBP 30m EBITDA in a sale process led by JP Morgan. A "competitive" auction process was launched earlier this year and had attracted strategics and sponsors, the source said.

An IPO could eventually be an exit option, subject to market conditions at the time, the source added. EQT may also be encouraged by the interest of strategic players and sponsors during a future auction process and could consider a sale as an option, they added.

Among SPT Labtech's competitors are Beckman Coulter's Labcyte, as well as Analytik Jena of Endress Hauser in the low volume liquid handling markets, the source said. Within the higher liquid handling market, Agilent and PerkinElmer are identified as
competitors. In sample storage, Hamilton Company and Azenta Life Sciences are key peers, they added.

Finally, in cryo electron microscopy, Thermo Fisher and Cryosol are the main players in the market, they added.

EQT declined to comment.

Company
Based in Melbourn, UK, SPT Labtech helps researchers save time through automation. It manufactures and designs automated liquid handling, sample preparation, and storage instruments, as well as corresponding consumables and support services for life science research. The Company was founded in 1997 and spun out from TTP Group. Since 2018 it has been owned by Battery Ventures.

People
EQT Private Equity – Michael Bauer (partner and global co-head of the healthcare team).
SPT Labtech – David Newble (CEO).

Advisors
Equity – Evercore (M&A), Kirkland & Ellis (legal), Deloitte (financial and tax), BCG (commercial), Ringstone (technology); The Footprint Firm (ESG).
Vendor – JP Morgan (financial advisor); Charles Russell Speechlys and SecondSight Law (legal).