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Riverside Acquires Portuguese Provider of Cryopreservation and Isolation of Umbilical Cord Stem Cells October 01, 2009

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Crioestaminal joins Riverside’s European Portfolio

Type:  Platform acquisition

Key Stats: 9th Acquisition of 2009;  217th Acquisition Overall

Fund Family:  Riverside Europe Fund IV (“REF IV”)

Crioestaminal
Based in Cantanhede, Portugal
• Collects, isolates and cryopreserves stem cells from children’s umbilical cord blood for possible future medical use.
• Pioneer and market leader in Portugal with an estimated market share of 58% in 2008.
• One of the main European players, with successfully completed real-life transplants.

Of Note:
The Riverside Company has acquired Crioestaminal, a company that isolates and cryopreserves stem cells from umbilical cord blood. Riverside is acquiring the Portuguese company with some of the founders and key members of the management team.

Founded in 2003 by a group of young entrepreneurs with experience in the Portuguese healthcare industry, Crioestaminal gives the parents of newborn babies the opportunity to collect, isolate and cryopreserve umbilical cord blood stem cells. More than 30,000 parents have entrusted Crioestaminal with the responsibility to save stem cells from their children.

If necessary, these cells can be used by the family to treat serious illnesses in the future since stem cells are the precursors to just about every type of specialized cell in the body and provide an unlimited supply of replacement tissues to help treat everything from diabetes to Parkinson’s disease. These services are provided through public and private hospitals.

The worldwide market in stem-cell therapeutics is predicted to reach anywhere between $10 billion to $30 billion by 2015 and Crioestaminal, due to its first-mover advantage, earned reputation, and management experience, will continue to play an important role in the future of the industry.

Equity for the deal was provided by Riverside’s most recent fund, Riverside Europe Fund IV, and the acquisition debt was provided by Banco Espirito Santo and Millenium Banco Comercial Português.

Partner Marcos Lladó worked on the Crioestaminal deal from the Riverside office in Madrid, which covers all of Iberia. This is Riverside’s second Portuguese transaction, following the acquisition of ONI-Telecom - Infocomunicações S.A. in 2007.
 
Riverside acquires Portuguese provider of isolation and cryopreservation of umbilical cord blood stem cells

Quotes:
Marcos Lladó, Riverside Partner
“The acquisition of Crioestaminal represents the first step of our plan to create a European leader in the collection, isolation and cryopreservation of stem cells. Expanding on the strong market position of Crioestaminal in Portugal and Spain, we are seeking to increase the group’s international presence through acquisitions in different geographies and to diversify towards other services related to stem cells and genetic diagnostics.”

“We are eager to partner with the management team of Crioestaminal to spearhead the project, since under their guidance the company has grown to become a leader in its niche in Portugal. We look forward to supporting the team in the growth and internationalization of the company, leveraging Riverside’s experience in developing small companies and international footprint.”

Raúl Santos, Crioestaminal founder and CEO
“Riverside will help us reinforce our strong position in the cryopreservation of stem cells in Spain and Portugal and accelerate the internationalization process of our company. Our management team is very proud to have attracted the interest of a company such as Riverside, and confident that together with its very experienced team we will achieve the objective of building a worldwide reference in the stem cells field.”

Riverside Team:
Marcos Lladó, Partner, led the Madrid team consisting of Rafael Álvarez-Novoa, Associate and Juan Barnechea, Vice President Origination.

Partners:
Riverside was advised by Ernst & Young (financial and tax due diligence), Garrigues (legal due diligence and transaction advisory) and AT Kearney (market/commercial due diligence).

The Riverside Company (www.riversidecompany.com or www.riversideeurope.com)
The Riverside Company is a global private equity firm focused on acquiring leading small and medium-sized enterprises (with a value of up to $150 million) and partnering with strong management teams to enhance the success of its companies through acquisitions and organic growth. Since its founding in 1988, the firm has invested in 217 transactions with a total enterprise value of $5.0 billion. The investment portfolio in North America, Europe and Asia includes 68 companies with annual sales totaling $3.3 billion/€2.5 billion, EBITDA of $506 million/€384 million and more than 13,000 employees (June 2009). Riverside offers the resources to complete acquisitions smoothly - thanks to its capital endowment (just under €2.4 billion), its more than 180 professionals in 18 offices (Atlanta, Brussels, Budapest, Chicago, Cleveland, Dallas, Eindhoven, Hong Kong, Los Angeles, Madrid, Munich, New York, Prague, San Francisco, Seoul, Stockholm, Tokyo and Warsaw) and its longstanding relationships with partner lenders. According to Thomson Venture Economics, seven of Riverside’s nine mature funds rank in the top 25% of all funds (as at 31 December 2008). The firm’s investors include the world’s leading pension funds, endowments, funds of funds, insurance companies and banks.

Crioestaminal (www.crioestaminal.pt)
Founded in 2003, Crioestaminal is a pioneer and leader in Portugal in isolation and cryopreservation of stem cells from umbilical cord blood, with more than 30,000 parents who entrusted Crioestaminal the responsibility to save the stem cells of their children as of today. The company was recently recognized with the “PME Excelência 2009” Award, which recognizes best performing small and medium size Portuguese companies highly contributing to overall country’s competitiveness. Crioestaminal is third-largest player in Europe in number of samples stored. The company is also present in Italy through an exclusive agreement with an Italian distributor (Hematos) since 2006, and in Spain where it established a subsidiary with its own sales force, starting operations in April 2008.Crioestaminal also offers innovative prenatal tests such as a baby gender test (“Menino ou Menina”) or an innovative deoxyribonucleic acid test (“DNA”) to precociously detect human papillomavirus (“HPV”).

Media Contact

Stephanie Fraser
Marketing Consultant
The Riverside Company
Cleveland: +1 216 344 1267
London: +44 20 3077 1923