Safeguard Scientifics, Inc. recently announced that its partner company (Putney, Inc.) signed an agreement to be acquired by Dechra Holdings US Inc. for $200 million in cash.
Safeguard expects to receive aggregate initial cash proceeds of $58 million, which excludes an amount of additional proceeds to be held in escrow, representing an approximate 3.9 times cash-on-cash return and 42 percent internal rate of return. Safeguard deployed $14.9 million in Putney since September 2011 and, prior to the acquisition, had a 28 percent primary ownership position.
The transaction is expected to close in April 2016, pending satisfactory completion of customary closing conditions and regulatory approval.
“We are proud of Putney’s execution in building a premier specialty pharmaceutical company committed to providing high quality, cost-effective generic medicines for pets,” said Stephen T. Zarrilli, President and CEO of Safeguard and member of the board at Putney. “The gain on the sale of our position in Putney through this well-timed exit with Dechra underscores our ability to identify and build value in companies with high-growth potential to ultimately drive shareholder value.
“In less than five years since Safeguard first deployed capital into Putney, the company increased its revenue approximately 350 percent, built out its scientific and medical affairs team, and developed and received FDA approval for 11 veterinary generics.”
Safeguard has a distinguished track record of fostering innovation and building market leaders. For six decades, Safeguard has been providing growth capital and operational support to entrepreneurs across an evolving spectrum of industries.