Cinven to Buy Labco in $1.3 Billion Deal After IPO Was Scrapped

Buyout firm Cinven agreed to acquire Labco SA for an enterprise value of 1.2 billion euros ($1.3 billion) after the French medical-diagnostics company scrapped an initial public offering earlier this month.

Cinven will buy the laboratory operator from a group of investors, the U.K. company said in a statement on Thursday.

Labco, whose owners include 3i Group Plc, halted a 440-million-euro IPO on May 13, the day trading was set to begin, citing volatility in financial markets. The Paris-based company then began gauging potential takeover interest from private-equity firms, people with knowledge of the matter said at the time.

An IPO would have given the company an equity value of as much as 960 million euros based on the marketed price range, according to terms of the deal seen by Bloomberg News. A May 12 term sheet showed that Labco had narrowed the price range for the sale to 7 euros to 7.25 euros a share from an initial 7 euros to 9 euros.

Once the stock sale was halted, Morgan Stanley began handling bidder inquiries, the people said. The New York-based bank and Deutsche Bank AG had been joint global coordinators for the IPO, with those two banks plus Barclays, Natixis and HSBC France as joint bookrunners.

Labco, founded in 2003, runs more than 160 laboratories, employs about 6,000 people and generated sales of 650 million euros last year.

3i, a London-based private-equity firm, owns 17 percent of Labco after an initial investment in 2008. 3i said Thursday that it will receive proceeds of 41 million pounds ($63 million) from the stake’s sale to Cinven.

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