Navis agrees Domestic Group medical equipment unit carve-out

DMD makes and distributes a range of cooling and freezing medical equipment used for the transportation and storage of vaccines, blood and pharmaceuticals globally, particularly in emerging markets.

DMD - which markets its products under the Domestic and Sibir brands - distributes its products to both areas with electrical power supply and off-grid loations where there is no power supply.

The unit is led by the current president and CEO Luc Provost, with Pascal Vannier acting as a senior advisor, and has about 160 employees. According to a release, DMD generated approximately EUR43 million ($49 million) in revenue in 2014.

"The capital cost of the cold chain equipment represents only 2% of the annual spend on emerging market vaccines, but is a critical element to ensure effective vaccines are delivered to patients, predominately children," said Nick Bloy, a managing director at Navis, in a statement. "The products and system solution offered by the company are differentiated from itscompetitors in terms of patent protected technology, functionality and durability."

As vaccines are temperature sensitive, this presents a significant challenge when trying to reach populations in remote areas. Michael Octoman, a partner of Navis, added that the investment would be used to invested heavily in research and development.

The divestment includes DMD's manufacturing plant in Luxemburg's Hosingen, its design and engineering resources, and its related global sales and marketing network. The transacton is in line Domestic Group's plan to put more focus on core business in marine, commercial and passenger vehicle industries.

Domestic Group generated SEK7.8 billion ($930 million) in revenue in 2013, slightly down from SEK$7.9 billion in 2012. EBITDA was SEK1.08 billion in 2013, compared with SEK1.04 billion a year ago. After the divestment, the group will see its revenue amounting to approximately SEK9.6 billion.

The transaction is expected to be completed in March. Navis manages about $5 billion in equity capital and has completed over 60 investments completed since its inception in 1998, of which nearly 20 have been follow-on transactions.

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