Silverfleet Capital

Oxoid

Investment overview

Oxoid, which is now the core part of Thermo Fisher Scientific’s microbiology division, is one of the world’s leading manufacturers and distributors of microbiological diagnostic products. Oxoid’s products are used in clinical and industrial laboratories worldwide to identify bacteria and other organisms causing disease and spoilage.

The investment rationale

Oxoid was a secondary buyout, the original buyout from Unilever having taken place approximately 3 years earlier. It was very clear to us that having successfully established themselves as an independent company with new IT systems, a new R&D pipeline and a growing share in the global prepared media market that the company was well positioned to grow strongly.

Value creation

During our ownership, in addition to the launch of several new products, a new prepared media facility was built in Perth, Scotland at a cost of £6 million and a small manufacturing plant was acquired in Adelaide, Australia. From its existing operation in Ontario, Canada the company was also able to significantly increase its sales into the US by expanding its American sales force. Through these actions and continued organic growth, Oxoid was able to approximately double its profits in just over 3 years.

The outcome

Oxoid was being prepared for an IPO when we received an unsolicited approach from Fisher Scientific, a large US listed laboratory equipment distributor. Fisher had decided to add value to its distribution operations by becoming vertically integrated into certain high value product areas and therefore Oxoid’s production of growing media products was a good fit.

The sale was completed in early 2004 generating a return of 2.8x and an IRR of 34%.