FOCUS ON INOVIE - Patience pays off as Inovie achieves huge growth


Growth stories

FOCUS ON INOVIE - Patience pays off as Inovie achieves huge growth

  • 24 June 2022

  • Private Equity

  • Buyout

Reading time: 3 minutes

    It took nearly two years to negotiate a deal with Inovie’s management team and its 400 biologist shareholders that would allow the company to continue its rapid growth. Read the interview with George Ruiz, President of Inovie and Nicolas Darnaud, Managing Director of Buyout Ardian.

    Why did it take such a long time to reach an agreement on how Ardian would invest in Inovie?

    Georges Ruiz: We knew that a major transformation was needed in order for us to keep growing. The company was owned by nearly 400 biologists – around a third needed to retire so we had to find a way to allow them to take out the value they had created. But we also had to enable younger biologists to buy into the group as shareholders. The plan we agreed with Ardian aligned their interests: it allowed people to exit and younger biologists to stay and create new value over the next four to five years. But in return for that opportunity, they had to accept a lower salary to bring us into line with industry norms. It is not easy to convince health professionals to give up more than half their salary overnight, so it took some time to explain the proposal to everyone.

    Nicolas Darnaud: Inovie had never had a financial investor before Ardian and had hoped to raise debt to enable this transformation. Georges knew that was impossible, but having developed the company as one entirely owned by its biologists, changing the model to include external capital was a sensitive step to take. In the end, however, 93% of the biologists supported Ardian’s proposal.

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    What progress have you made in developing the company since this transaction closed?

    ND: Our equity story is already done – in less than a year we have reached the targets we had set for year five. The group has been reorganized with the new shareholder structure, new governance, the rebasing of salaries and operational improvements. We have delivered huge external and organic growth, in addition to carrying out huge numbers of Covid‑19 tests. After only nine months, we had doubled the size of the company and completed a dividend recapitalization that brought excellent returns for our investors and the biologist shareholders.

    GR: We have filled the gaps in our coverage in France, especially in Paris where Ardian negotiated a major acquisition directly with the financial sponsor that owned the company. Overall, we signed nine acquisitions in less than a year, all of them proprietary.

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    What are your plans for the next stage of Inovie’s development?

    GR: The next big step will be digitalization, which will transform the patient journey. It will enable us to offer patients a better, quicker service and it will unlock big cost savings through automation, especially in the pre‑ and post‑analytical stages of the process. We can use digitalization to improve the way we report and interpret people’s results for them, and by replacing paper with digital reports the savings will be huge, €5 million – €6 million a year in postage costs alone.

    ND: We will continue to develop in genomics, fertility and the veterinary market, which is growing very strongly, and we are looking at European acquisitions. But Inovie also has successful operations in Middle East and Africa that have great potential. In the longer term, we think the diagnostics industry will move into predictive medicine and will combine different areas of diagnostics, such as medical imaging, with pathology labs.

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    For more stories like this, discover Ardian’s 2021 Annual Report