Momentum Corporate Finance has advised the Shareholders of Tocris Bioscience on its £75 million sale to Techne Corporation.

One of the largest South West based deals for 2011 has been announced with the £75 million sale of Bristol based Tocris Bioscience to US based Techne Corporation.

Bristol based Momentum Corporate Finance conducted an international auction of Tocris following the receipt of a number of unsolicited approaches for the business. The sale represents a bonanza for the management team who bought the business for only £14 million in 2006 in an all debt deal structured by buyout specialists Momentum.

Sales at Tocris reached £11.7 million in 2010 and its Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) approximately £7.4 million. The purchase price represents an EBITDA multiple of over ten times, and a turnover multiple of about 6.4 times.

Tocris produces chemical compounds for pharmaceutical research, including cell signalling and neuroscience. Exports represent more than 80% of sales for Tocris with the US and Japan among its key markets.

Techne, through its subsidiaries, R&D Systems, Inc. and R&D Systems Europe, Ltd., is a leading developer, manufacturer and distributor of products sold to biomedical researchers and clinical research laboratories.

Tocris Chief Executive Officer, Laurence Ede, said “Strategically, the fit is excellent, as both Tocris and R&D Systems have many customers in common and yet our product ranges are entirely complementary. Consequently, the combined business will represent far more of a one-stop-shop for life scientists and be ideally placed to compete in the global market. In addition, there are many similarities of culture between the two companies, not least a commitment in both cases to providing novel products and services of the highest quality.”

Laurence Ede also noted that “Momentum Corporate Finance have been our advisers since structuring our original management buyout deal in December 2006. Since then they have worked closely with us to build the international profile of the business. Tony Kenny from Momentum also joined our board as non executive Chairman. When we received approaches for the business they were able to quickly and confidentially sound out international purchasers and run an incredibly effective auction of the business. We are absolutely delighted with the deal that they eventually negotiated on our behalf. We were particularly impressed with Momentum’s ability to gain access to the most senior people in large multinationals as easily as if dealing with smaller companies. I am sure that this is substantially assisted by their approach of having multiple partners working on the deals that they are involved with.

We would not hesitate to recommend Momentum to any management team considering a management buy out or the sale of their business particularly where international buyers are likely to be involved.”

Tony Kenny, partner at Momentum Corporate Finance commented, “This deal proves that our business model of working over the long term with our clients is a recipe for success. Since advising on the original buy out four years ago we are pleased to have worked closely with the management team. We are delighted to have achieved a valuation of £75 million, representing an EBITDA multiple of more than ten times.”

Rob Crews, partner at Momentum added “Our unfettered access to large international purchasers was a key factor in the success of this transaction. This is a great result not just for the management team but also for the business – there is an excellent strategic fit between Tocris and Techne.”

Tom Oland, President and CEO of Techne, said “Tocris has a business model which mirrors that of R&D Systems with comparable financial metrics. Its strong market position has been earned through the development of a well-respected brand, a diverse and high-quality product line, an innovative product development pipeline and excellent service. The acquisition will enhance and supplement the depth and breadth of R&D Systems’ product offering and will augment our ability to serve research scientists, as well as leverage our marketing, sales and distribution capabilities with this important product class.”

Alastair Boorman, partner at Momentum noted, “All three partners were heavily involved in the deal process and this is a real vindication of our business model to provide clients with very senior resource. The personal involvement of Momentum’s partners has added value from the inception of the buy out through to the eventual realisation.”

Mr. Ede and the management team and employees of Tocris will continue its product development, marketing and sales activities from Bristol, U.K. They will also coordinate with R&D Systems and its related European and Chinese entities to expanded product distribution into the world-wide market.