The criminal justice forensic sector has been strengthened thanks to a deal brokered by corporate finance specialists Watersheds.
The sale of Orchid Cellmark Limited (Cellmark) to the Eurofins Scientific Group has been the culmination of a relationship built over a number of years, with Watersheds having previously advised on Cellmark’s acquisition of Pinmoore Animal Laboratory Services Ltd (PALS) in 2022. Cellmark is one of the largest suppliers of forensic analysis services to the police and is the UK’s leading DNA paternity testing laboratory.
The forensics sector has been under significant financial pressure in recent years, resulting in the House of Lords publishing a report in 2019 with recommendations to improve the sustainability of forensic science services.
Given that Cellmark and Eurofins both hold significant market share in the UK forensic testing market, clearance was required from the Competition and Markets Authority (CMA) for the transaction to take place. The deal brings a number of synergistic benefits and growth opportunities for both businesses, which will result in a stronger forensic science marketplace and greater stability for the sector.
John Stopher, Partner at Watersheds, explained: “The process of gaining CMA approval for the transaction to be cleared is uncommon for a deal of this size, so this was a fairly unusual one for us. Whilst this did add another layer of complexity to the deal, we were very pleased to have the transaction approved and so deliver an outcome that not only suited both the buyer and seller, but also fortified the forensic sector as a whole and its contribution to the criminal justice system.
“Unusual situations often present additional challenges, so it was important for us to ensure that the shareholders felt well-supported throughout the entire process in order to help drive a successful outcome. Throughout our time working with the shareholders, we’ve assisted with both the acquisition of PALS and the sale of Cellmark, demonstrating our ability to add value for our clients in a range of scenarios.”
David Hartshorne, former Managing Director and shareholder of Cellmark said: “Watersheds is a great organisation to have on your side. They have a wealth of experience and expertise and provided valuable analysis and advice during our acquisition and subsequent business sale. In particular, we really valued their personal approach to doing business and felt very supported by the team. The Watersheds team was proactive and showed considerable tenacity and commitment to help drive both processes to successful conclusions.”