Arsenal Capital Partners, a specialized private equity firm investing in healthcare and industrials companies, has completed the acquisition of Cello Health plc, the global healthcare-focused advisory firm, for a total enterprise value of £181.8 million.
The acquisition of Cello Health provides the foundation for a new enterprise to enable healthcare and biopharmaceutical clients to maximize the value of their products. In doing so, it aims to help clients accelerate and optimize patient access to medical and technological advances that have a transformative effect on patient’s lives. Through a series of investments to acquire, invest in and develop best-in-breed companies, the new enterprise that is backed by Arsenal is assembling a differentiated set of capabilities across critical domains including strategy and insights, evidence generation, data and analytics, and communications – all rooted in world-class science and enabled by the latest technology.
Cello Health’s capabilities and culture are highly complementary with those of BresMed, a leader in health economic research and submissions to payers, which was acquired by Arsenal in February 2020.
Jon Williams, CEO of Arsenal’s new enterprise, said:
“We are delighted to complete the acquisition of Cello Health as the foundation of this ambitious enterprise. I’m proud to be associated with a company that has such an exceptional reputation, a rare combination of commercial and scientific credentials, and a culture that’s dynamic and collaborative.
The opportunity in front of us is significant and exciting. Our clients are developing and commercializing new products in a world that’s complex, uncertain and often risky. But medical science and technology are moving quickly, leading to major breakthroughs and numerous opportunities. We are creating an enterprise that supports better strategic decisions, generates robust data and evidence, undertakes advanced analytics to draw out critical insights, and supports communication with a range of critical stakeholders. We look forward to working with our new colleagues as we embark on the next important phase of our journey.”
Mark Scott, CEO of Cello Health, said:
“Today’s announcement marks an exciting moment for Cello Health. We have a shared belief with Arsenal that clients need a partner that combines industry expertise, commercial experience, scientific depth, and cutting-edge technology and data. We’re confident that we can accelerate growth by expanding support for our clients, investing in innovation, and continuing our ambition to become a world-class, truly global company.”
Gene Gorbach, Investment Partner of Arsenal, said:
“We are excited that Cello Health’s management and employees will be at the heart of this critical effort to build a market-leading enterprise. We look forward to leveraging Arsenal’s capabilities in North America and Europe to achieve our shared vision for Cello Health as a foundation for a new company that will enable clients to achieve commercial success with their products, and for patients to gain access to life-changing innovations.”
Ropes & Gray International LLP provided legal advice to Arsenal. Marriott Harrison LLP provided legal advice to Cello Health. Greenhill acted as financial adviser, and Cenkos acted as nominated adviser and broker, to Cello Health. Rothschild & Co acted as financial adviser to Arsenal.
About Cello Health
Cello Health is a global healthcare-focused advisory firm comprised of a set of leading scientific, commercial advisory and digital delivery capabilities. Cello Health currently services 24 of the top 25 pharmaceutical clients globally, as well as a wide range of biotech, diagnostics, devices and other key non-healthcare clients. Cello Health enables clients to commercialise, differentiate their assets, and drive brand success in ever more complex global markets. The business delivers its services through nearly 1,000 highly skilled professionals, utilising latest thinking, technology and digital solutions. Cello Health delivers its services from an office network in the UK and USA, with hub offices in New York City, Philadelphia, New Jersey, London, Edinburgh, and Farnham. For further information, please visit: www.cellohealth.com.
About Cello Health acquisition
Under the terms of the acquisition, which completed today, 11 August 2020, Cello Health shareholders were entitled to receive 161 pence in cash for each Cello Health share. The acquisition valued the entire issued and to be issued share capital of Cello Health for approximately £178.8 million. This represents a premium of approximately 28.3 percent to the volume weighted average price per Cello Health share of 125.4 pence in the six months to 30 June 2020. The total enterprise value of the acquisition is £181.8 million, as a result, the acquisition represents an implied enterprise value multiple of approximately 12.3x Cello Health adjusted EBITDA of £14.8 million for the year ended 31 December 2019. The Scheme became effective today, following being sanctioned by the Court, and the delisting of Cello Health shares is expected to take place in due course.
Arsenal is a leading private equity firm that specializes in investments in middle–market specialty industrials and healthcare companies. Since its inception in 2000, Arsenal has raised institutional equity investment funds of $5.3 billion, completed more than 45 platform investments and achieved more than 30 realizations. Arsenal invests in industry sectors in which the firm has significant prior knowledge and experience. The firm works with management teams to build strategically important companies with leading market positions, high growth, and high value–add. For more information, please visit.
BresMed, which was acquired by Arsenal in 2020, is a health economic and outcomes research consultancy that provides health economic solutions to the global pharmaceutical industry. Established in 2006, BresMed has more than 150 staff across offices in the U.K., Ireland, the Netherlands, the U.S., and India who work to support clients with drug, device, and diagnostic products to reach markets at the best possible price. BresMed’s services span the full product development pipeline, allowing it to support its clients from initial portfolio planning, strategy development, and health technology assessment through to post-launch value demonstration in multiple jurisdictions. For more information, please visit www.bresmed.com.