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Warburg nets 4.5x return on Polyplus

Illustration of an exit sign made out of a hundred dollar bill

Illustration: Sarah Grillo/Axios

Warburg Pincus realized a 4.5x return on its recently announced sale of Polyplus, sources tell Axios exclusively.

Why it matters: Exits in health care are few and far between and this is Warburg's second successful exit this year, returning the firm more than $4 billion total.

Details: The sources also said that Polyplus was purchased for some 550 million euros and the sale had a price tag of about 2.4 billion euros.

  • Warburg declined to comment.
  • Warburg acquired a roughly 50% stake in Polyplus alongside its existing owner ArchiMed in April 2020.
  • There were four interested strategic buyers, and that got cut down to three finalists before Sartorius won the deal.

Of note: VillageMD acquired Summit Health-City MD from Warburg for $8.9 billion, in a transaction that closed at the beginning of the year.

How it works: Polyplus is a global supplier of transfection reagents, a critical consumable input that supports the rapidly growing gene therapy end market.

  • Gene therapies have the promise of curing previously incurable diseases.

What they are saying: "Since our investment, and with our and ArchiMed’s support, Polyplus has achieved a lot of growth initiatives," says TJ Carella, head of the health care group at Warburg.

  • The management team was upgraded, including the hiring of a new CEO and we recruited a "world-class board," he says.
  • The company successfully launched next-generation reagents and new service lines that now represent roughly 50% of revenue and also expanded capacity including initiating an important GMP expansion.
  • Polyplus also made several strategic acquisitions that expanded its geographic footprint and added capabilities.

Zoom in: "A core element to our investment thesis was that Polyplus’ leadership position in the cell and gene therapy would make it a highly attractive target to a number of strategic acquirers," Carella says.

  • Sartorius demonstrated lots of interest, even before Warburg was ready to sell.
  • "We studied critical suppliers and enablers to the gene therapy end market as part of a broader life science tools and consumables thesis," Carella said.

Yes, but: Exits from one PE firm to another are not as common as exits to strategics these days.

  • "Sometimes you have to make a decision to sell a company even when you might be leaving lots of growth on the table," he said. "When a motivated and well-capitalized strategic calls and the business is a great fit and a good home for management to realize its growth objectives, it's something we take very seriously."
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