Avista Capital Partners is looking for liquidity in its investment in medical imaging agent provider Lantheus. The company recently filed for a $125 million IPO. The financing would allow Lantheus to repay some of the debt that the private equity firm loaded it up with, in part to pay itself dividends.
Lantheus is the product of private equity's participation in the disaggregation of pharma. Avista acquired Bristol-Myers Squibb's ($BMS) medical imaging business in January 2008 for a reported $525 million and it was dubbed Lantheus.
Lantheus raised $400 million in debt and paid out a 2011 dividend of $106 million to Avista, according to the SEC filing. The private equity firm only paid $230 million to fund the buyout, with the remainder coming from debt ascribed to the company, according to The Wall Street Journal at the time. The debt holds a steep 9.75% interest rate and comes due in 2017.
Founded in 1956, the business that became Lantheus was purchased by DuPont in 1981 and became part of BMS on the biopharma's 2001 acquisition of DuPont.
The business has been struggling in recent years, revenues are down and it's not profitable. The company reported revenues of $283.7 million in 2013, with a net loss of $61.6 million. Its 2013 revenue were almost half of what the business reported in 2008; it had revenues of $536 million in 2008; $360.2 million in 2009 and $354 million in 2010.
Lantheus markets 10 medical imaging products. TechneLite accounted for 32.5% of Lantheus revenues last year; it is a self-contained generator of radioisotope technetium, which has a six hour half-life and is used to prepare imaging agents. Next up was Definity, which represented 27.5% of 2013 revenues. It's an injectable contrast imaging agent used during echocardiograms. Definity was used in about 75% of these procedures in the U.S. in December 2013, according to the company.
Avista has more than $5 billion under management. Lantheus was an investment from its $2 billion first fund that closed in 2007.
- here is the S-1 filing
- and here is the 2011 WSJ story