Huron Capital has sold its interest in Labstat International through its holding company, Apex Laboratories International, in a transaction that returned over 6 times its original investment. Apex was acquired by Alaris Royalty Corp., a Canadian private investment firm, and Labstat management.
Labstat is an independent laboratory measuring chemical emissions from tobacco smoke and smokeless tobacco products, and testing for the biological impact of such products. Labstat provides chemistry and toxicology testing services to tobacco manufacturers for both regulatory and commercial purposes. Labstat facilitates the regulation of tobacco products by providing analytical testing services to governmental agencies involved in tobacco control and to market participants needing to comply with mandatory reporting requirements. The company is based in Kitchener, Ontario (www.labstat.com).
Huron’s 2006 investment in Labstat and Apex was made through its second fund, The Huron Fund II L.P., a $185 million fund closed in 2005. In 2006, Huron partnered with Dr. William Rickert (CEO) and other members of Labstat’s management team to recapitalize the business. During Huron’s hold period, the team further developed its non-regulatory business, developed several new customer relationships on a global basis, and positioned the company to capitalize on new governmental tobacco control initiatives in the United States that are driving continued growth of the business.
“Labstat was a tremendous success for Huron Capital. The investment was consistent with Huron’s focus on partnering with management teams in businesses that are leaders in their markets and positioned for growth. We are grateful for the collaboration with Dr. Rickert and his team over the last five years, and we hope to continue our track record of partnering with world-class executives and their companies in the years to come,” said Nick Barker, Vice President at Huron Capital.
Huron Capital Partners invests up to $70 million per transaction in middle market companies that have revenues up to $300 million and EBITDAs of $5 million or more. Typical transaction values are from $20 million to $200 million. Sectors of interest include niche manufacturing, distribution and business services. Since its founding in 1999, Huron has acquired or invested in 57 companies with aggregate revenues in excess of $1 billion. Investments have been made in the US and Canada in a variety of areas, including print solutions & document management, education, healthcare products & services, specialty chemicals, specialty packaging, consumer products, home décor, passenger transportation services, building products, office furniture components and laboratory testing. Huron Capital currently manages over $600 million in committed equity through three private equity funds, and has offices in Detroit and Toronto (www.huroncapital.com).
KPMG Corporate Finance advised Labstat on the transaction and Honigman, Miller, Schwartz and Cohn served as counsel.
