Dates: 2007 to 2014
Bond Capital Partners (“BCP”) provided £6m of development finance in 2007. The investment was provided by way of a subordinated secured debt facility with an equity participation. The funds were to be used by Sauflon to establish a manufacturing operation in Budapest, Hungary. The business performed ahead of expectation, and by 2013 had repaid all of the £6m debt facility that we had provided.
Sauflon is a leading manufacturer of contact lens and contact lens solutions. It was founded in 1985 and the founder remained as CEO until its sale in 2014. Prior to 2006, the business was focussed on “solutions”. Its sales strategy was to sell only to independent optical retailers. In 2001 management took the decision to develop its own contact lenses and, in particular, Silicon Hydrogel (“SiH”) lenses. In 2005 they launched their own hydrogel lenses. In 2006 BCP was approached to provide finance for a manufacturing plant in Hungary.
The investment strategy at the time of the funding was to grow the business organically with a view to exit in three to five years. Since 2006, Sauflon has grown strongly as well as transformed its market presence by the launch of their very successful daily disposable SiH lenses in 2009. Even by 2013, two of the ‘Big Four’ global players were not able to match Sauflon’s SiH lenses on performance and price. It was no surprise that the Cooper Companies were prepared to pay handsomely in 2014 to acquire Sauflon’s technology and low-cost manufacturing base in Hungary. The sale of Sauflon to the Cooper Companies was completed in August 2014.
With BCP’s funding, Sauflon was able to open a new factory in 2007 in Budapest with sufficient capacity to allow it to manufacture their SiH daily disposable contact lens at a unit cost which their competitors found difficult to match.
Moreover, BCP had provided strategic advice as the company sought a buyer, based on BCP’s own considerable corporate experience. This included introducing appropriate legal advisor and investment bank to handle the sale process.
BCP’s support was invaluable at a time when raising debt was particularly challenging. Their industry experience set them apart from other potential investors and we at Sauflon were grateful for much of their pragmatic strategic advice. In addition to the financial benefits of the partnership, we found BCP to be very open, honest and fully supportive.