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Scoop: Edgewater's TSS seeks buyer

Sarah Pringle
May 17, 2022
Illustration of a gloved hand with tweezers holding a $100 bill.
Illustration: Gabriella Turrisi/Axios

Technical Safety Services, which keeps lab environments compliant and working properly, is entering the second round of its sale process, three sources tell Sarah.

What's happening: The Berkeley, California-based company, backed by The Edgewater Funds (majority, per PitchBook) and JZ Capital Partners, fielded first-round bids last week, sources say.

  • Houlihan Lokey and Harris Williams are advising the sellers on what sources call a fast-moving process.
  • Final bids are due in two to three weeks, one source adds.

By the numbers: The company is marketing $32 million of forward 2022 EBITDA, sources say.

  • A 25x multiple was required to advance into the second round, one source says. (Which, if the $32m is applied, suggests an $800m-plus price tag.)
  • One party that bid $600 million did not make it into the second round, a second source adds.

How it works: TSS deploys technicians that test, certify, maintain and calibrate a broad range of lab equipment for life science customers.

  • That includes critical medical equipment across cleanrooms and controlled environments, cold storage to ensure vaccine integrity, gas and water systems, lab preparation equipment and instrumentation.
  • The goal is to keep its life sciences customers and their workforces compliant, productive and safe.

Between the lines: Growth comes from the end-market.

  • More labs are being built after years of record biotech funding (although Q1 was the slowest quarter in three years), translating to white space for market penetration and M&A.
  • TSS has a recurring revenue model and sticky customer base, one source notes.

Catch up fast: Under the backing of Chicago-based Edgewater, TSS has been an aggressive consolidator of the market.

  • In January it bought Sunnyvale, California's AL-TAR, after snapping up three companies in 2021.
  • AL-TAR pushed its employee count to a combined 530, and the combination created one of the largest independent lab equipment service providers in the U.S., TSS said.

TSS, Edgewater, JZ Capital and Harris Williams did not return requests for comment. Houlihan declined to comment.

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