With refinancing, ARCHIMED’s NAMSA returns more than a third of investment to shareholders in less than a year and gets significant capital for future acquisitions
The doubling of EBITDA since ARCHIMED’s purchase allows NAMSA to increase initial borrowing with no rise in leverage.
ARCHIMED has arranged a refinancing for NAMSA – one of five key investments of ARCHIMED’s €1 billion MED Platform I fund – less than a year after formally acquiring the company for a combination of debt and equity. Ares Management Corporation, which funded the debt used to acquire NAMSA and its subsequent acquisitions, provided the refinancing.
Toledo, Ohio-based NAMSA, founded in 1967, is a Contract Research Organization (CRO), offering cost-saving, time-efficient outsourcing services for healthcare testing and clinical trials. The group is the world’s leading CRO for the fast growing medical devices market, offering consulting, testing and clinical research through every development stage, from conception to global regulatory approval and commercialization.
Over the past year, NAMSA doubled its earnings before interest, taxes, depreciation and amortization. This was done mainly through organic growth in cross-selling and the build-out of operations, with cardiovascular testing capacity showing the most noteworthy expansion. Three acquisitions were completed over seven months; they added to performance and are projected to contribute even more significantly to EBITDA in 2022. The combination of organic growth and acquistions allowed NAMSA to consolidate its global leadership of outsourced medical device research and to significantly increase debt without increasing leverage – i.e. with no change in the ratio of net debt to EBITDA. The refinancing also comes with improved terms and conditions, including interest that is more than 10 percent lower than the rate on the original financing.
The refinancing will return more than a third of NAMSA’s purchase price to shareholders, including MED Platform I’s limited partners, founding families and management. The latter two groups have a roughly 30 percent stake in NAMSA. The refinancing also includes capital for further acquisitions. “We expect another great year,” says André-Michel Ballester, a Managing Partner at ARCHIMED. “Substantial capital has been reserved by both NAMSA’s shareholders and lenders for further acquisitive growth and organic build-out.” For the next several years, ARCHIMED expects top and bottom-line growth at NAMSA to substantially exceed the projected 10 percent annual growth of the medical device CRO market, where outsourcing expansion is driven by rising regulation and complexity. The founders of NAMSA – board member and former CEO John Gorski and his family – have played a key role ensuring successful acquisitions and integration and they will continue to do so in the future.
MED Platform I buys majority stakes in platform companies in Europe and the US for $50 million to $500 million in association with existing owners and managers. ARCHIMED also manages MED I, currently ranked the best performing buyout fund at a global level for the 2014 vintage, according to Preqin data. MED I has distributed more than four times invested capital to limited partners and has a total return in excess of six times invested capital.