Minister welcomes Bain Capital buying majority stake in PRUK
Health Minister Dr Dan Poulter has welcomed one of the world’s leading investment firms acquiring a majority stake in Plasma Resources UK.
Health Minister Dr Dan Poulter has welcomed one of the world’s leading investment firms acquiring a majority stake in Plasma Resources UK, which manufactures blood plasma products.
Bain Capital has bought 80 per cent of Plasma Resources UK (PRUK) from the Department of Health. The transaction values PRUK at approximately £230 million. This includes an upfront cash payment of £90million and a deferred payment expected to be worth £110m in 5 years’ time. They have also committed to invest a further £50 million in the company to create a UK Life Sciences champion. PRUK’s headquarters will remain in the UK and the Department of Health will continue to own a 20 per cent share in the company.
Health Minister Dr Dan Poulter said:
This deal will ensure that patients will have access to high quality plasma products for years to come and it is good news that Bain are investing in medicine and the life science industry in the UK.
Bain Capital was chosen following a fair and open competitive process which looked at who offered the best deal for patients, and to ensure future employment at the company.
I am delighted that Bain is investing more than £50 million in PRUK and will ensure it has the technology, skills and experience to supply high quality plasma products for patients and for the company to grow.
PRUK has a UK-based facility - Bio Products Laboratory Limited (BPL) in Elstree, Hertfordshire, as well as a US-based plasma supply company, DCI Biologicals Inc. PRUK imports blood plasma from DCI Biologicals Inc. and manufactures it into blood plasma products at BPL in Elstree. These are then supplied to the NHS and to other health organisations around the world. Although government-owned, approximately half of BPL’s sales are currently made overseas and it competes with other global companies.
Devin O’Reilly, Managing Director of Bain Capital in London and leader of the firm’s healthcare team in Europe, said:
We are excited about the prospects of PRUK in the growing plasma products industry and are committed to investing in the company to help it reach its full potential in this global market. We have completed over 50 healthcare investments in companies such as HCA, Warner Chilcott and Quintiles, and we will ensure that all of this experience and expertise is applied to building PRUK into a true global leader.
Robin Marshall, Managing Director of Bain Capital in London and leader of the firm’s UK team, said:
We are delighted to be partnering with the Department of Health on this opportunity. To enable PRUK to fulfil its potential and become a globally competitive, UK headquartered life sciences champion, we intend to embark on a substantial capital investment plan of more than £50 million to increase production capacity, refurbish and maintain the existing facilities, develop new products and expand the company’s international reach. This deal is reminiscent in many ways to our investment in WorldPay, which we bought from RBS in 2010, where we reignited growth in a potential world leading UK business through the application of our operational expertise and significant capital investment.
The government outlined plans to seek private investment in PRUK in January, to attract commercial investment and ensure it can grow and effectively compete in the internationally competitive bio-science market. This followed an announcement in July last year when the government disclosed that it was exploring opportunities to make sure PRUK has a strong and viable future.
Bain Capital were successful because their business plan provided the best option for patients and the UK tax-payer. Their long term vision is to transform PRUK into a Life Sciences champion, with more than £50 million of planned capital investment in the UK, supporting jobs and ensuring security of supply of plasma products.
Only offers which recognised the key strategic position of PRUK were considered, including a commitment to invest in UK plasma products to allow the business to grow and support jobs by maintaining a UK-based plasma plant.
Background information
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The government’s Spending Review framework in June 2010 urged departments to focus on essential activities, maximise value from assets that do not need be held in the public sector and ensure value for money for the taxpayer.
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The sale of the government shares in PRUK was prompted by a thorough assessment of the company’s business plan and future options that concluded that the best interests of the company, the taxpayer and patients would be best met through investment from the private sector.
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Bain Capital is one of the world’s leading private investment firms with approximately $70 billion in assets under management. The firm works alongside the management teams of the companies it invests in to further their growth and development. Its executives have extensive operational and consulting experience and since 1984 have invested in over 250 companies around the world. Bain Capital is also a global leader in healthcare investment, with experience of investing in over 50 companies including HCA, Warner Chilcott and Quintiles.
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PRUK has a UK-based facility - Bio Products Laboratory Limited (BPL) - and a US-based plasma supply company, DCI Biologicals Inc. While BPL is a Government-owned company, it is a commercial manufacturer of medicinal products - such as clotting factors and immunoglobulin preparations.
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BPL is required to buy the blood plasma from the US. It does not use UK blood or plasma. This is because, since 1999, it has been public policy not to use UK plasma for the manufacture of blood plasma products due to the emergence of Creutzfeldt-Jakob disease (vCJD) in the UK.
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BPL is based in Elstree, near Watford, in Hertfordshire. It was established in the 1950s, and until December 2010, was part of NHS Blood and Transplant Special Health Authority. BPL is one of a number of suppliers to the NHS for plasma products.
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NHSBT, which was separated from BPL in December 2010, is not included in the sale of PRUK and will remain in the public sector. Donated blood in the UK is not used by BPL or DCI.
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The Department was advised by Lazard &Co throughout the sale process.