What was the deal?

Our investment in Antibody Analytics completed in October 2023. It is a contract research organisation (CRO) that supports developers of antibody-targeted therapeutics, complex biologics and immunotherapies in oncology. It’s on the cutting edge of ‘large-molecule’ drug development, which itself is on the cutting edge of drug discovery. It requires a very high level of expertise – at our meetings I am often the only person at the table without a PhD. The management team is led by Andy Upsall, a life sciences expert experienced in translating that into a commercial proposition.

What were the timescales?

Healthcare and life sciences is one of the four core sectors we invest in. From 2022 to 2023 we mapped the CRO space and identified Antibody Analytics. The deal was almost two years in the making. Translating the science into a value creation plan and an investable strategy was the challenge. We first met Andy in April 2023 and spent three months building a relationship, linking him with other CEOs in our portfolio, so he could take references on us. We put forward a proposal in July 2023, agreed exclusivity by the end of that month and, after a short focused exclusivity period, completed the deal at the end of October. Because we’d done so much hard work on the design and structure of the deal, and getting alignment with the management team, it was relatively straightforward.

Who were the advisers?

RSM carried out the financial and tax due diligence, PMSI commercial due diligence, and Hill Dickinson handled legals. Claritas provided tax structuring advice and Catalysis advice on organisational effectiveness. Antibody Analytics took corporate finance advice from Baird and legal advice from Addleshaw Goddard. It was important for us to collaborate with sector specialists, people who were experts in life sciences. In addition, we also have our life sciences and healthcare networks – trusted non-execs we can lean on, who have previously held industry roles. We really needed specialist commercial due diligence so used Gareth Elliott at PMSI, who has been in the industry a long time. Andy and his team had built a great business, but needed to identify the key things to focus on and drive value. 

How was the deal structured?

It was a development capital straight cash equity investment, with no bank debt. We took a minority stake. The deal value was undisclosed. Included in our six-figure investment was an amount to create a world-class laboratory in Motherwell, Scotland. The plan is to grow to more than 250 staff, working with universities to capture the best life sciences talent. We don’t have different approaches for minority and majority stakes; it is a partnership with Andy and the team, the full NorthEdge experience – it’s not watered down because it’s a minority stake. 

What were the challenges?

One challenge was finding a non-executive chair who could understand and help translate the team’s language around the science to a private equity environment. We also needed someone who had scaled a life sciences business. Paul McCluskey, founder and CEO of Concept Life Sciences, which went through several rounds of private equity investment, has been appointed. He brings a huge amount of experience and expertise. Another challenge was balancing time demands on the team between doing the deal and stewarding a high-growth business. We wanted the deal done quickly, so they could get back to the day job.