Organic Growth Masterclass: Binding Site, backed by Nordic Capital

Binding Site is a UK-based specialty diagnostic company, providing assays and instrumentation for clinicians to diagnose and monitor multiple myeloma, and other related blood cancers. It has strong roots with Birmingham University, and its founder, Professor Jo Bradwell, is still a significant minority shareholder.

Nordic Capital funds have owned Binding Site since 2011, and continues to be the controlling shareholder, first as part of its Fund VII portfolio and since 2018, within a continuation vehicle. This has allowed it to maximise the company’s value creation potential by providing active support and fresh capital over an additional five-year holding period.

MANAGEMENT UPGRADE

Jonas Agnblad, Partner & Co-head of Healthcare at Nordic Capital, says: “The business has always been very entrepreneurial and innovative, and with annual growth of 15-20 per cent comes some inevitable growing pains. One of our initial priorities was to help the business to mature and we therefore worked to develop the executive management team during the first 18 months of ownership. The founder transitioned to the board and a new, external, CEO and CFO were recruited.

Other external hires were also made on the commercial site, including a new head of commercial operations, which made an immediate impact.”

BROADENING EXPOSURE

Jonas says: “To drive further adoption of Binding Site’s core diagnostic assays, we made a significant investment into building scientific endorsement, which is a key part of the sales process. Today, there are over 3,000 scientific publications that draw on independent research, reference Freelite, a key tool for diagnosing multiple myeloma, which says a lot about the scientific backing for Binding Site’s products.

Expanding the business’ direct presence into new markets such as China, Brazil and Australia, where the company would have historically grown through its distributors, was also a significant commercial driver that ensured continued product uptake.”

INNOVATION

Jonas says: “Innovation was the very reason for this company to exist originally, so it was really important to keep investing in this area.

We worked with management to introduce a new diagnostic instrument platform, to replace the one that existed prior to our investment. The older model was not competitive and was reaching the end of its lifetime. As a result, Binding Site has been able to grow its installed base of instrument platforms by about 10 times during our ownership, and this has, in turn, increased revenue. Binding Site has also been able to use the platform to cross-sell other diagnostic assays to new customers, accelerating growth.

After more than ten years, the company is still on an exciting growth journey. There are not many companies that hold such a meaningful market share and still grow profitably at high, double digit rates. The potential for new product development also remains very strong, and so in recognition of the ongoing opportunity for value creation, we took the decision in 2018 to extend our holding period for up to five further years.