BUSINESS DESCRIPTION

Established ten years ago, Kinapse is a leading global provider of advisory, capability building and operational services to the life sciences industries, focused on regulatory compliance and quality. The business, which is headquartered in London, has offices in the UK, India and the United States and employs over 500 people worldwide.

The business has grown rapidly over the last few years and now partners with nine out of the top ten global pharmaceutical companies.

WHY WE INVESTED

Kinapse operates in a global market estimated to be worth $8 billion growing at mid-single digits and benefitting from an ongoing increase in outsourcing penetration. The business has a strong position in its core sector, with long term relationships with nine out of the top ten global pharmaceutical companies and strong customer feedback.

The long-term nature of outsourcing contracts provide high visibility of future growth, with high renewal rates and a track record of upselling further work to its existing customer base. In addition, its consulting activities show a consistent track record of winning and delivering projects for new clients who then typically will engage on longer-term outsourcing contracts.

HOW DO WE INTEND TO CREATE VALUE?

Kinapse is well-invested to support future growth, whilst maintaining margins and represents an attractive platform for potential M&A opportunities and expanding into adjacent sectors or services.

WHAT HAS BEEN ACHIEVED?

In June 2016, Kurt Brykman started as the new CEO, assuming the role from Andy Black (co-founder) and ending a longer than anticipated transitional period. In January 2017, Daniel Bednar joined as the new CFO.

Kinapse has a near-term pipeline of large outsourcing deals and we have already been successful in winning one of these; management is now focused on winning at least one more in the near future. We have also supported Kinapse in building a more rigorous account management process to support pipeline management and conversion.

HOW IS IT PERFORMING?

Current trading has been in line with plan in the BPO business, but the Advisory business has traded behind plan with a longer-than-planned management succession (now completed) particularly affecting this.

Kinapse is a new investment in the portfolio and is valued broadly in line with its original investment value.

HOW WILL WE CRYSTALISE VALUE?

Kinapse’s regulatory-driven and long-term contracted business model will continue to attract private equity interest at exit.

In addition, there are also a number of potential trade exit opportunities from large contract research organisations and other large global life sciences outsourcing players.

Sector Location Date of Investment Residual cost £’000 Unrealised Value £’000
Services UK February 2016 9,959 9,986