Avista triples its money on Inform

Avista Capital Partners’ sale of Inform Diagnostics produced a gross MOIC of 3x and gross IRR of 39%, according to an LP letter seen by Axios.

Why it matters: Upon completion of the deal, Avista expects to rake in an estimated $132 million in proceeds, or a total of $163 million when accounting for proceeds already received to date, and price adjustments.

• A $170 million TEV equates to a 12.1x multiple of 2022 budgeted EBITDA of $14.1 million, per the LP letter.
• Inform serves ~1,300 clients representing 2,700-plus physicians.

Driving the news: Avista completed its previously announced sale of Inform, one of the largest national pathology laboratories, at a total enterprise value of $170 million.

• The buyer is Fulgent Genetics (Nasdaq: FLGT), a technology-based genetic testing company specializing in oncology, infectious and rare diseases, and reproductive health.

Context: This is the fourth full realization for Avista IV, a $1.2 billion pool, following its exit of MPI Research in 2018, and Organogenesis and Arcadia in 2021.

• Avista produced a 3x MOIC on MPI, while Organogenesis and Arcadia generated 3.4x and 3.7x gross MOICs, respectively, the LP letter discloses.

Flashback: In 2017, Avista carved out Inform (then Miraca Life Sciences) from Japan's Miraca Holdings via Fund IV, and then built out the standalone business via a newly recruited leadership team.

• The New York-based private equity firm injected $55 million into the Irving, Texas-based company, according to the letter.
• During the health care-exclusive firm's investment, strategic growth levers at Inform included the acquisition of Therapath, a New York neuropathology laboratory, upgrading compliance processes, and the expansion of its Newton, Massachusetts facility, among other growth levers.