In a fascinating turn of events, Miroslav Reljanović, a 64-year-old neurologist and founder of the British life sciences company Ergomed, has seen his net worth skyrocket beyond £120 million. This significant increase comes after a takeover offer by private equity firm Permira, which values the formerly London-listed business at a staggering £703 million. The Croatian entrepreneur, who founded Ergomed in 1997 and holds an 18% stake in the company, is poised to financially benefit from this private acquisition.

Ergomed’s private acquisition is an exemplar of a growing trend among companies listed on the London Stock Exchange, who are leaving the capital’s public markets in pursuit of higher valuations elsewhere. The offer of £13.51 per share by Permira is a 28.3% premium over Ergomed’s share price at Friday’s market close. This follows a previous £4.5 billion deal in which veterinary pharmaceuticals company Dechra was taken private by investment firm EQT at a roughly 40% premium over its previous share price.

Ergomed Founder’s Net Worth Skyrockets as Business Moves to Private Ownership

Miroslav Reljanović, the founder of British life sciences firm Ergomed, has seen his net worth surpass £120 million as the company becomes the latest to transition from being London-listed to private. The 64-year-old neurologist from Zagreb, Croatia, who started Ergomed in 1997, holds an 18% stake in the company and is poised to profit as private equity firm Permira offers to take over the company, valuing it at £703 million.

A Premium Takeover Offer

Permira’s offer of £13.51 per share is a 28.3% premium over Ergomed’s share price at Friday’s market close, mirroring a growing trend for companies listed on the London Stock Exchange to exit public markets in search of higher valuations. The move follows a previous £4.5 billion deal in which veterinary pharmaceuticals firm Dechra was taken private by investment firm EQT at a nearly 40% premium over its former share price.

Reljanović has voiced his belief that the acquisition by Permira represents an excellent opportunity for Ergomed shareholders to realise value at a highly attractive valuation. He added that private ownership by funds advised by Permira will allow Ergomed to build on its foundations, while providing access to Permira’s operational expertise, global network, and capital.

Heading Towards Private Equity

Susannah Streeter, head of money and markets at Hargreaves Lansdown, noted Ergomed’s move as yet another firm seeking new opportunities in the world of private equity. The financial backing of Permira is expected to provide Ergomed with the necessary funding streams to achieve expansion. Streeter suggests that the reticence of investors towards the UK market may have played a part in this decision, given Ergomed’s shares were more than a third below the firm’s highs achieved in November 2021 before the offer.

About Ergomed and Permira

Ergomed, based in Surrey, specialises in clinical research and trial services for the pharma industry. Listed on the AIM exchange in 2014 when it was valued at £46 million, the firm has made a series of overseas acquisitions, including Texas-based research business MedSource in a $25 million deal in 2020. The company focuses on research for rare diseases, and reported revenue of £76.7 million in the first half of 2023, a 10% increase on the previous year.

Permira, a London-based private equity firm, was spun off from asset management giant Schroders in the late 1990s. The firm, which specialises in healthcare and technology, has over £60 billion in assets under management and is controlled via an opaque ownership structure in Guernsey. It has invested in several other life sciences firms, including Althea, Cambrex, and Creganna.

Final Notes

It was initially suggested that Reljanović would receive a £120 million payout as part of the deal. However, an Ergomed spokesperson has since clarified that a portion of Reljanović’s proceeds from the transaction would be rolled over into securities in a new entity, Eden Topco.

Takeaways: This recent development underscores a growing trend of London-listed companies moving to private equity. It also highlights the potential for significant financial gains for founders and shareholders in such transitions. Ergomed’s move could indicate a broader shift in the life sciences industry towards private funding and ownership for more robust growth and expansion.