NVM celebrates lucrative exit

As NVM Private Equity celebrates the 25th anniversary of its formation, the exit of medical diagnostics company DxS provides an additional reason for cheer.

The company has been sold to global diagnostics group Qiagen for up to $130 million (£80 million), leading to a ‘record exit’ for the Newcastle-based investor.

Qiagen paid an initial $95 million for the business, consisting of $75 million in cash and the rest in deferred payments. This initial consideration would represent a return of eight times money for NVM and an IRR of 34 per cent, and would improve to 13 times money and 39 per cent if earn-outs were fully achieved.

Other investors who have benefited from the deal are venture capital firm YFM, which reports a return of up to 11 times money for its British Smaller Technology Companies VCT 2, Northamptonshire-based Hygea VCT, and DxS’s management, led by founder and CEO Steve Little.

Clive Austin (pictured), a member of the investment team at NVM’s Manchester office, says the exit represents ‘an outstanding success’ for the firm, which first backed DxS in 2001 with £1.25 million and led further funding rounds in 2004 and 2006 bringing its total investment to £3 million.

Doug Stellman, an investment director at YFM, says contract wins with major pharmaceutical players such as Amgen have been pivotal to the company’s success.

DxS and its shareholders were advised on the deal by law firm Osborne Clarke while Qiagen was represented by Morrison & Foerster.

The acquired company employs 80 staff and delivered pre-tax profits of close to £4.5 million in the year to June.