Hydron Limited designed and manufactured contact lenses and was part of US multinational pharmaceuticals company Allergan Inc. Hydron was a profitable business involved in research and production of speciality lenses, a market that was well positioned for future growth. In August 1993, Cinven co-led a management buyout of the business resulting from Allergan’s decision to divest itself of its contact lens manufacturing operations.
Cinven’s investment thesis was to back a new management team to grow Hydron through new product introduction, improving working capital and building a better sales and distribution infrastructure to capture the market opportunity provided by a strong niche brand.
New product launches were successful and Hydron was able to considerably reduce its net debt. The business achieved significant technical advances in manufacturing as well as distribution efficiencies. This positioned the company in such a way that it attracted interest from trade buyers. The business was sold to UK quoted Bio-Compatibles plc in March 2000.
Multiple returned on investment: 2.4x