Ares has acquired French pharmaceuticals company Laboratoire X.O after terminating a change of control default waiver at the end of March, sources told Reorg.
The change of control event occurred in mid 2021 when the founders of private equity fund Novalpina Capital were
stripped of control over the fund by investors. A waiver was in place for around five months unitil Ares triggered an exit process giving it until May 6 to call in the loan, which it has now done.
Novalpina Capital
acquired Laboratoire X.O in 2020 for a valuation of around €300 million. Ares provided a unitranche
facility of approximately €150 million.
Laboratoire X.O markets a range of prescription and over-the-counter medicines in France and abroad, including the hypertension drug Loxen. It was one of three companies owned by Novalpina alongside controversial Israeli cybersecurity company
NSO and Estonian gambling group
Olympic Entertainment.
In an emailed statement, Berkeley Research Group, or BRG, the current manager of mid-market private equity fund Novalpina, said the “legality of the actions taken by Ares Capital will be vigorously challenged.” It added that the acquisition was effected in direct opposition to commercial agreements between the parties. “All necessary steps will be taken to ensure that the Fund’s interest in LXO is restored as quickly as possible.”
BRG said Ares has previously acknowledged its concerns have nothing to do with the creditworthiness of Laboratoire X.O. Instead, BRG asserts that Ares’ actions appear related to concerns it has regarding the Novalpina GP’s attempt to regain control over the Fund.
BRG has been engaged in a power struggle with two of the former owners for control over the group, as
reported. Last month, the English High Court
dismissed an injunction against two founders finding that the correct forum for the dispute is Luxembourg.
BRG added that the original Novalpina general partner is attempting to reverse the fund’s recent actions, which have included directing NSO to cease any new sales to risky customers, and ensuring compliance with US Commerce Department rules. From its appointment, BRG, said it has sought to investigate Novalpina's role in acquiring NSO Group and selling its Pegasus spyware to non-democratic regimes.
NSO is in default on its loans after skipping interest payments due at the end of last year. Lenders have agreed to forebear the missed interest payments in exchange for a roughly 5% increase in the term loans’ margins, as
reported. NSO is also subject to ongoing
litigation in California from Apple Inc. over what Apple describes as NSO’s “highly invasive” Pegasus technology.