A sale to Avacta plc, delivering a significant exit and a platform for continued expansion in diagnostics.

Launch Diagnostics is a leading UK and European supplier of medical diagnostic testing equipment and consumables to hospital pharmacies across a range of medical conditions.

Established in 1990, Launch Diagnostics is one of the most successful companies in the UK’s diagnostics industry, providing immunodiagnostic and molecular test products, and technical support across a range of healthcare settings.

K3 Deal Advisory acted as sell side adviser to the founder shareholder on the sale of Launch Diagnostics to listed business Avacta plc. Working closely between buyer and seller an agreement was made reflecting upfront consideration and an earnout on a cash only basis.

Using its existing market leadership position, Launch Diagnostics had become a significant supplier of Covid testing products into hospital environments across the UK and Europe, building off its existing links into the global supply chain and expertise within PCR testing. The fluctuations throughout the pandemic and with changes in new Covid variants meant that planning for and understanding a future level of sales for such products was highly subjective.

As a market leader in the supply of diagnostic kits the rigour of regulatory and commercial diligence alongside financial and legal was paramount.

This was one of the largest deals of 2022 in the Kent region (disclosed as £37m in total) and represented an excellent realisation for the founder shareholder who handed on the business to a new owner to continue its growth and expand its footprint into other medical settings and geographies.

The transaction involved Avacta sourcing significant new funding which was delivered in the period shortly after the Autumn 2022 ‘mini-budget’ during a period of significant dislocation in debt and equity markets, the challenges of which should not be underestimated.

Launch employs 70 staff in Longfield, Kent and Yorkshire based Avacta sees this as a platform investment in the sector for further growth in the UK and across Europe.