Details of the deal were not announced. Tilia, a Chicago-based private equity firm, participated in the investment.
Growing laboratory powerhouse
The FSNS labs will join a number of facilities that are already housed within Certified Group, one of the Warburg Pincus portfolio companies. Certified Group includes Certified Laboratories, EAS Consulting, Labstat, LabSmart, ABC Testing, Microconsult Inc, and MicroQuality Laboratories. MicroQuality Labs was the most recent addition prior to today’s announcement.
"The investment from Warburg Pincus reflects the current success of our company and underscores our top-tier position as a leading North American platform provider of testing and regulatory consulting services. The combined businesses position our company with the broadest footprint and most diversified service offering in the industry," said John Bellinger, CEO of FSNS. "We are excited to work with Warburg Pincus, Tilia and the Certified team to grow the combined companies further.”
Warburg Pincus announced that Bellinger will become CEO of Certified Group.
Concerns about consolidation
Consolation of analytical laboratories is a trend that predated the global pandemic. Both LabCorp/Covance and Eurofins have embarked on acquisition sprees and by the end of 2020 were operating 36 and 70 labs in the US, respectively.
With the recent deals, the Warburg Pincus portfolio of laboratory facilities is now approaching that size. The merger will bring Certified Group's employee base to close to 1,600 total employees, across 20 states and provinces in over 30 laboratories in North America.
Industry stakeholders interviewed by NutraIngredients-USA in late 2019 had a mixed view of the trend toward consolidation in the analytical laboratory end of the supplement industry. One one hand, it could simplify things for customers and potentially drive costs down.
Others, however, observed that the supplement industry is a highly variegated one, with many of hundreds of different ingredients that need to be verified. Some feared that these specialized services aimed at smaller companies could get lost in the consolidation shuffle.
