L Catterton invests $182m in Japanese healthcare business
L Catterton has invested JPY20 billion ($182 million) in PHC Holdings Corporation, a Japanese healthcare business – formerly known as Panasonic Healthcare – backed by KKR.
The PE firm is currently deploying its third pan-regional fund, which closed at $1.45 billion in 2019, although PHC’s statement does not specify which vehicle made the investment. L Catterton will support growth by leveraging its knowledge and networks within the consumer healthcare industry.
PHC was established in 2014 when KKR carved out Panasonic’s medical equipment division for JPY165 billion. It then allocated a 20% stake in the business to Panasonic. A year later, PHC completed a $1.15 billion bolt-on acquisition of Bayer’s diabetes care business, consolidating its global leading position in the blood glucose monitoring meters and diabetes sensors market.
In 2016, Mitsui & Co. bought a 22% stake in PHC for JPY54.1 billion, valuing the business at JPY245.9 billion. Panasonic’s 20% holding was unchanged while KKR’s stake fell to 58%. The other shareholder in the company is Life Science Institute, which is controlled by Mitsubishi Chemical Holdings Group.
The Bayer business was integrated as Ascensia Diabetes Care, where sits alongside PHC’s existing diabetes operation and diagnostics and life sciences and healthcare services divisions. Consolidated net sales came to JPY272 billion in the 2019 financial year with products and services distributed across more than 125 countries.
The company’s footprint has been supplemented by other acquisitions, such as anatomical pathology business Epredia, clinical testing specialist LSI Medience Corporation, diagnostic equipment maker SciMed, and bioinformatics business Amelieff Corporation. Epredia was bought from Thermo Fisher Scientific, while the LSI Medience deal saw Life Science Institute join PHC’s investor roster.
“The healthcare industry, and medical devices in particular, are rapidly shifting from a scientific and engineering orientation towards greater consumer-centricity. This positions L Catterton to leverage our deep insights and play a valuable role in the development of PHCHD’s future businesses, particularly in the U.S. and Asia,” said Chinta Bhagat, managing partner of L Catterton Asia.
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