Phadia is the global leading in-vitro allergy diagnostics company, specialising in the development, manufacture and marketing of complete blood systems to support the clinical diagnosis and monitoring of allergy and auto-immune diseases.

Based in Uppsala, Sweden, it has international operations in 19 locations, supplying more than 3,000 laboratories in 60 countries.

Our investment

Phadia was a global leader in its niche of allergy diagnostics but within biopharmaceutical company Pfizer it had demonstrated relatively low growth and was not a clear strategic fit with other parts of the group.

We have deep sector knowledge in healthcare and specific experience of investing in the diagnostic sub-sector, having owned Oxoid, a supplier to microbiology diagnostic labs.

In 2004, we were working with an industry adviser, Iain Ross, who had previously served as chief executive of Allergy Therapeutics and together, we were convinced the field of allergy and allergy diagnostics would continue to grow.

In particular, we believed we could support Phadia in its ambition to take in-vitro allergy diagnostics into the US, where allergy testing had traditionally been conducted using so-called skin prick tests only.

We also saw an opportunity to improve Phadia’s operational efficiency and reduce costs significantly as a stand-alone entity. The company had also completed a major capital expenditure programme, investing in a next generation of diagnostic equipment to install at its clients’ laboratories. With increased cost control and good working capital management, Phadia was set to be extremely cash generative for the next few years.

Value creation

The acquisition itself was a highly complex carve-out from the Pfizer group, involving 19 simultaneous asset purchases and regulatory filings - something our team have extensive experience of.

We helped build the incumbent management team with additional executive and non-executive appointments to drive efficiencies and support international growth. With this deeper management resource, we could swiftly implement the cost efficiency programme, which resulted in an immediate and substantial profit increase.

Soon after our investment, we invested in a pilot programme in the US, recruiting sales representatives and demonstrating the US market was ready for in-vitro testing. The business also continued to invest in research and development of a ‘doctor’s office’ allergy test, which obtained regulatory approval shortly after our exit.

In 2005, we supported management’s buy and build ambitions, with the acquisition of an important supplier of rare allergens to Phadia in a €44m transaction. This gave the business security of supply and also captured increased margins.


Due to Phadia’s strong cash generation, we were able to refinance the business in September 2005, returning 105% of cost to our investors. In 2006, we launched a dual-track sale process with an auction to trade and private equity buyers alongside a potential flotation of the company.

In January 2007, we completed the sale of the business to buyout firm Cinven for €1.3bn, resulting in a return of 4.8x cost and a 96% IRR. The deal was awarded large deal of the year 2007 by trade body the British Private Equity and Venture Capital Association (BVCA).





Investment date


Exit date


Deal size (exit)



Mid-market fund





Key facts

BVCA 2007

large deal of the year





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