Genova Diagnostics Purchased by Los Angeles Equity Firm

Genova Diagnostics, the Asheville, N.C.-based esoteric laboratory, has changed hands from one set of private equity firms to another. Nautic Partners and Ferrer Freeman & Co. LLC (FFC) sold Genova earlier this month to Los Angeles-based Levine Leichtman Capital Partners (LLCP) and some of Genova’s executives for an undisclosed sum. Currently, it is the only health care venture in the Levine Leichtman portfolio. “I’d like to thank Nautic and FFC for their partnership in building the company to where it is today,” said Ted Hull, Genova’s chief executive officer, in a statement. “We operated as partners and succeeded together. We believe the company is well positioned to continue on its growth trajectory into the future under LLCP’s ownership.” Nautic, Ferrer Freeman, and Levine Leichtman declined to comment about the sale. A statement issued by the parties indicated Hull and his team of senior executives would remain in their current position and retain a significant ownership stake in the firm. Genova was founded in 1986 and has focused primarily on testing for chronic complex diseases. It began branching out into nutritional and digestive-related testing with the acquisition of Metametrix last year for an undisclosed sum. Genova recently obtained a patent for a universal test not only for irritable bowel syndrome, but also for imbalances in levels of gut bacteria, records show. Introducing new forms of bacteria into the digestive tract is becoming an emerging form of treatment for some patients with gastrointestinal conditions. The statement issued by Genova suggested its new co-owner would be investing significantly in its future product lines and expansion. “As the company continues to grow and diversify its product offering, having a partner with the financial means and experience of [Levine Leichtman] is very attractive,” said Sarah Martin, Genova’s chief financial officer. “I expect this partnership will contribute meaningfully to the continued growth of our franchise.” Takeaway: The full development of a diagnostic laboratory may require the investment of several outside equity firms over a period of years, if not decades.