Sebia

Jun 2010

Healthcare

Oncology Diagnostics

Business
Sebia is the worldwide leader in clinical electrophoresis equipment and reagents. Its systems analyse proteins in order to detect various diseases and conditions, primarily myeloma, which typically affects people who are over 50 years old. Sebia is a global business and generates over 80% of its sales outside France.

The company sells machines to private and public testing laboratories and has a large installed base of around 10,000 instruments. Sebia’s instruments run on Sebia’s proprietary reagents, which account for the bulk of its sales: 75% in 2009. This ‘razor / razorblade’ business model provides a highly stable, predictable revenue base.

Sebia’s high growth rate has been driven by (i) growth in its market, which is underpinned by long-term trends including ageing populations, an increase in the number of people being monitored, price increases, and product improvements, and (ii) gains in market share resulting from Sebia’s superior technology, the effectiveness of its sales force and the high standard of service it provides.

Strategy
Cinven’s strategy, developed in conjunction with the existing management team, is to further develop Sebia’s successful business model by:

• taking full advantage of the growth opportunities presented by an expanding market;
• upgrading customers to improved, higher-value systems;
• further increasing its market share in countries such as Germany and the USA through its superior technology and customer service;
• exploiting the growth of emerging markets.

Sebia is commercializing new detection tests for proteins such as Hb and CDT that can be run on its installed base of machines, offering significant additional growth potential.

As the owner of Phadia, the leading allergy and autoimmunity diagnostics business, Cinven has previous experience of the high-value in-vitro diagnostics industry. Although Phadia and Sebia will remain standalone investments, there are many similarities between the two investment strategies, allowing both businesses to benefit from Cinven’s ownership.