Merthyr-based life sciences firm Simbec-Orion is looking to drive global expansion after being acquired by its management team with the backing of private equity firm CBPE Capital, through its £459m capital funding IX.

The exact value of the multi-million pound deal has not been disclosed. However WalesOnline understands the Welsh Government, which had around a 70% stake in the business, has secured a three times return on its investment.

The Welsh Government had initially invested several million pounds into what was then Simbec Research in 2013 in the form of equity, as the first investment from its £50m Wales Life Sciences Investment Fund (WLSIF). The fund was managed on a discretionary basis by Arthurian Life Sciences, chaired by biotech serial entrepreneur and investor Sir Chris Evans.

The Wales Life Sciences Investment Fund is now managed by Arix Capital Management, a subsidiary of Arix Bioscience.

Simbec-Orion has seen total revenue increase from £13.2m in 2014 to a projected over £30m last year. The company, which employs three hundred people at sites in Merthyr and Paris, designs, executes and delivers its clients clinical development needs across healthy volunteer and patient based clinical studies. Its clients include biotech companies and mid-cap pharmaceutical companies.

Through clinical drug testing on behalf of Pfizer for high blood pressure, at what was then Simbec in Merthyr, an unexpected side effect in male patients was noted that led to the development of erectile dysfunction drug Viagra.

CBPE’s investment will fund the continued growth of Simbec-Orion both organically and through acquisitions. CBPE has a history of backing experienced management teams with a track record in operational delivery and merger and acquisitions. It has committed additional funds for future investment in operations, facilities and further expansion, including in the US.

Chris Evans, founder and deputy chairman of Arix Bioscience, said “We first backed Simbec Research in May 2013 through the Wales Life Sciences Investment Fund. Today, the group is in strong financial health, the Welsh site employs more than 120 people and the group approximately 300 people. The investment is excellent news for the company and for the Wales Life Sciences Investment Fund’s commitment.”

Ronald Openshaw, chief executive of Simbec-Orion, said “The combination of Simbec Research and Orion Clinical provided the base to create a growing CRO (contract research organisation) in the mid-market. We created a strategy for a clearly defined and differentiated offering where our people can use their excellence, commitment and passion to improve patients lives. We are delighted to secure this return for the WLSIF and have clear plans with CBPE for the future growth of the group.”

Anand Jain, partner with CBPE, said “We have been following Simbec-Orion’s growth since the merger in 2014 and are delighted to be supporting the business through the next phase of its development. We are excited about providing Simbec-Orion with the investment and support required to further develop their services and to expand geographically.”

Chris Evans said “We could have sold to a corporate who could have striped it down and laid people off. However, having private equity backing will provide funding to create new jobs in Merthyr and allow the business to expand and see a multiple rise in its valuation over the next few years. The deal is also good news for the local supply chain that we built up for Simbec-Orion and the prestige for Wales in having a global business expanding from Merthyr. It is also a really good example, from what was the first investment in the Wales Life Sciences Investment Fund, of not only a healthy return on capital for the Welsh Government, but the benefits that its investment also had in creating new jobs and supporting a strong Welsh supply chain. Perhaps it can see that this isn’t such a bad model and could be replicated in other areas of the Welsh economy. We have some really nice businesses in Wales, but they just don’t have enough capital to expand. With this sort of investment, and replicating the type of expertise and contacts that we have used to support the life sciences sector in Wales, they could become £50m to £100m businesses quite quickly.”

Other companies backed by the Wales Life Sciences Investment Fund include ReNeuron and Proton Partners International.

This article was updated on February 28th to correct the figure for the CBPE Capital Fund IX.