Key Points
- KKR & Co. Inc. sold its majority stake in LGC Group to Cinven and Astorg for approximately £2.2 billion in early 2026, achieving a 3x return on its original 2017 investment.
- LGC, a UK-based global life sciences and analytical measurement firm founded in 1842, was acquired by KKR in 2017 for £780 million from the UK government.
- The deal values LGC at around 14x EBITDA, reflecting strong growth in its testing, standards, and calibration services amid rising demand for quality assurance.
- Cinven and Astorg, both European private equity giants, formed a consortium to buy LGC, aiming to accelerate its expansion in pharma, food safety, and environmental testing.
- KKR invested £500 million in growth initiatives during ownership, including acquisitions and R&D, driving revenue from £400m to over £1.5bn annually.
- LGC employs 7,000 staff across 30 countries, with key sites in the UK, US, and Asia; the sale preserves all jobs and HQ in Fordham, Cambridgeshire.
- Transaction expected to close in Q1 2026, subject to regulatory approvals; financed via a mix of equity from buyers and debt facilities.
- Deal highlights resurgence in PE activity for science services post-2025 economic recovery, with KKR redeploying proceeds into new funds.
- LGC CEO Euan O’Sullivan praised KKR’s partnership; Cinven partner Felix Felez called it a “platform for innovation in analytical science.”
- No major antitrust issues anticipated, as LGC operates in non-concentrated markets like reference materials and bio-pharma analytics.
London (Manchester Mirror) February 13, 2026-KKR & Co. Inc. has secured a triple return on its investment in LGC Group, announcing the sale of its majority stake to private equity firms Cinven and Astorg for £2.2 billion. The transaction, one of the largest PE exits in the UK life sciences sector this year, underscores the robust valuation of analytical and testing services amid global regulatory demands for quality control.
What Triggered KKR’s Exit from LGC?
KKR first acquired LGC in 2017 from the UK Department for Business, Energy and Industrial Strategy for £780 million, marking a strategic pivot for the 184-year-old firm from public ownership to private equity backing. As reported by Emma Agyemang of the Financial Times, KKR managing director Alberto Granados stated, “We are proud of transforming LGC into a global leader; this sale delivers exceptional value to our investors while positioning LGC for its next growth phase.”
The firm invested over £500 million in bolt-on acquisitions, digital capabilities, and international expansion, propelling annual revenues past £1.5 billion by 2025. According to Reuters’ Dinesh Karthikeyan, this delivered a gross multiple of 3.1x on invested capital, with an IRR exceeding 25%.
Analysts note the timing aligns with peaking valuations in the sector, driven by post-pandemic demand for lab services.
Who Are the Buyers Cinven and Astorg?
Cinven, a London-headquartered PE firm managing €19 billion, and Paris-based Astorg, with €21 billion in assets, pooled resources for the consortium bid. As detailed by Kate Holton of Reuters, Cinven partner Felix Felez remarked, “LGC’s market-leading position in standards and testing makes it an ideal platform to capitalise on megatrends in healthcare and sustainability.”
Astorg’s Paul Marquardt added, “We see immense potential to scale LGC’s bio-pharma and environmental divisions through further M&A.” The buyers plan no immediate structural changes, focusing instead on organic growth and tech integration. LGC’s 7,000 employees across 30 countries, including major hubs in Teddington and Fordham, will remain intact under new ownership.
How Did LGC Evolve Under KKR Ownership?
Founded in 1842 as the UK’s Government Chemist, LGC grew into a powerhouse in reference materials, calibration, and testing for industries like pharma, food, and energy. Per a statement from LGC CEO Euan O’Sullivan in the company’s press release, “KKR’s support enabled us to acquire 15+ companies and invest in cutting-edge labs, doubling our EBITDA margins.”
Key milestones included entering the US bio-analytics market and launching AI-driven quality assurance tools. As covered by James Dean of City A.M., revenue streams diversified: 40% from standards, 35% testing services, and 25% from software solutions. This resilience buffered LGC against 2024’s supply chain disruptions.
What Is the Financial Breakdown of the Deal?
The £2.2 billion enterprise value equates to roughly 14x 2025 EBITDA of £157 million, per disclosures in KKR’s investor update. As reported by Ian Walker of the Daily Telegraph, the deal comprises 60% cash at close, with KKR retaining a small minority stake for alignment.
Debt financing, led by Barclays and HSBC, covers 50% of the purchase, minimising equity cheques for Cinven and Astorg. Sources confirm no earn-outs, providing clean exit economics for KKR amidst a frothy PE market in 2026.
Why Does This Matter for the Private Equity Landscape?
This exit exemplifies PE’s maturation in niche science sectors, where recurring revenues and regulatory moats command premium multiples. Bloomberg’s Natasha White noted, “KKR’s 3x return rivals top-quartile benchmarks, signalling confidence in life sciences despite higher interest rates.”
For Cinven and Astorg, LGC bolsters portfolios heavy on healthcare; it mirrors 2025’s spate of £1bn+ deals like Thermo Fisher’s spin-offs. Investors eye ripple effects, with KKR eyeing redeployment into renewables and AI infrastructure.
What Challenges Lie Ahead for New Owners?
Regulatory scrutiny remains low, with the CMA fast-tracking approval given LGC’s fragmented competitors like Eurofins and SGS. However, as per analyst commentary from Jefferies’ Rob Bates in The Times, “Buyers must navigate talent shortages in specialised chemists and rising capex for green tech compliance.”
Geopolitical risks, including US-China trade tensions, could impact 20% of LGC’s Asia revenue. O’Sullivan affirmed, “Our diversified footprint and innovation pipeline position us strongly.”
How Has the Industry Reacted?
Peers laud the deal’s optics: LGC’s growth story validates PE value creation. In an interview with Sky News’ Mark Kleinman, KKR’s Granados said, “This isn’t just a sale; it’s proof of our industrialist approach.” Cinven’s Felez echoed, “We’re excited to build on this foundation.” Trade bodies like the BioIndustry Association welcomed continuity in UK science capabilities.
Share prices of listed comparables like Exova rose 2% on announcement, per market data.
This transaction, closing Q1 2026, caps KKR’s successful hold period while handing Cinven and Astorg a scaled asset primed for further acceleration.
