Orangewood Partners will announce later this morning that the New York-based firm has made a strategic investment in Barrington James, a Crawley, West Sussex-based global recruitment business that serves the pharmaceutical, biotechnology and medical device sectors. Financial terms were not disclosed.
Neil Goldfarb, managing partner of Orangewood, shared the strategy behind the deal with PE Hub Europe in an exclusive email exchange.
Barrington James operates in the “highly attractive and growing life sciences sector, helping highly skilled professionals and companies come together”, Goldfarb said.
Positions in the life sciences industry “require significant industry knowledge and an understanding of the needs of these very specialised and technical businesses”, he said. “Naturally, the pandemic put a large spotlight on the life sciences and biopharma sectors, which we think are going to continue to attract interest and investment over the long term.”
He added the firm also liked Barrington James’ management team and the culture the company built over the years, and that is “hard to replicate”.
“Partnering with management and founders is a core pillar of the Orangewood approach, and we are excited to partner with Dan Barrington, the company’s founder and CEO, to continue to scale the business,” he said.
This is the first institutional equity capital in the company’s history. While Orangewood is now the company’s largest shareholder, the company’s leadership team rolled over a significant portion of their interest into the deal.
“We are backing Dan and his team and do not anticipate any changes to the way the day-to-day of the business is run today,” explained Goldfarb.
Companies that seek to address staffing shortages in the healthcare industry have been attracting private equity investors lately. For example, One Equity Partners announced last week that the New York firm had acquired Prime Time Healthcare, a healthcare staffing services provider that specialises in nurses and other practitioners.
Staffing is a “long-term pain point for companies”, Goldfarb said. “The labour force continues to become more transient and, with work from home here to stay, we believe these trends will only accelerate in the future.”
Goldfarb added that the life sciences market is expected to continue to grow at 7 percent to 8 percent for the next several years.
The growth was “partially spurred by covid, with massive amounts of dollars being invested in the space and acceleration generally of clinical trials and drug development”, he said. “The investment in the sector requires more people, and people that have very specific talents and areas of expertise. Moreover, new technologies and therapies have been born, and we were reminded of the benefits of drug discovery, which should be a long-term boon for the industry. These market trends, combined with the ongoing labour force challenges, means that staffing companies will become even more important in the future as the sector continues to scale.”
Barrington James started in the UK but had started to make inroads into the US over the past five years or so. Today, the company has offices in New York; Raleigh, North Carolina; and Greenville, South Carolina.
“Given the significant life sciences infrastructure in the US, we believe there continues to be opportunity for further growth here and across North America,” Goldfarb said.
The strategy “will include investments in technology and expansion of capabilities to serve Barrington James’ existing clients across the globe”, he said. “To do this, we will certainly evaluate both organic and strategic inorganic opportunities. The life sciences staffing space is very fragmented globally, and our goal is to build on the solid foundation Barrington has built to become the preeminent firm in the sector.”