A Connecticut-based private equity firm has joined with other investors to take a majority stake in Grenova Inc., a company that was founded in Richmond and has seen steady growth supplying sterilization equipment for laboratories.
Peloton Equity LLC, a private equity firm that invests in innovative health care companies, said Monday that it has closed a recapitalization of Grenova. Also joining the investment were accounts managed by Hamilton Lane and Morgan Stanley Alternative Investment Partners, along with Grenova’s management and other investors.
Grenova was founded in 2014 by Ali Safavi, who had previously worked for a laboratory automation company in North Carolina. Safavi started the company as a small operation with the goal of reducing the enormous amount of plastic waste that is discarded from laboratory operations around the world.
The company develops and makes equipment that sterilizes laboratory tools such as pipettes, reducing the need to dispose of them after just one use.
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Since its founding, Grenova has gained more than 300 laboratory-operations customers in various industries such as commercial, government and university labs. The company has expanded its operations in the Richmond area several times.
Last year, Grenova relocated its operations from a 10,000-square-foot facility in the Manchester area of South Richmond to a 35,000-square-foot building at 1900 Ellen Road just north of Scott’s Addition. The company also announced plans to invest $10.6 million to expand its production and hire 250 people over the next three years.
“This is growth capital for us,” Safavi said on Monday. Now that company has established a presence in providing equipment for the sterilization of pipette tips, “we are looking to expand into other devices that can offer solutions for other plastic consumables,” he said.
“This [investment] will enable us to expand our engineering and new product development,” Safavi said, adding that the company also plans to add about 30 employees this year, boosting its staff of 55 people to about 85.
Financial terms of the deal were not disclosed. Michael O’ Rourke, a principal at Peloton, said the firm’s investment is “significant,” but Safavi said he and other managers along with some current shareholders also will retain a significant ownership stake.
“Our foundational investment thesis is to invest in growing healthcare companies,” O’Rourke said.
“With Grenova, certainly we see a very compelling future of growth for a variety of reasons,” he said. “They are at the forefront of some massive trends that are driving healthcare forward.”
Among those are personalized medicine, treating specialty populations, and consumer-driven diagnostics and testing, O’Rourke said.
“Those markets have tremendous projected growth, and that trickles down to the amount of plastic lab consumables that these labs are going to consume,” he said. “Grenova offers a pretty unique solution to those end markets, which is to reduce costs and also to reduce waste.”
The is the second investment that Peloton has made in a Richmond-area company in less than a year. In 2021, the firm backed a group of executives in acquiring firstSTREET for Boomers and Beyond Inc. — a Chesterfield County company that develops and sells direct-to-consumer health and lifestyle products for seniors — and rebranded the business as Journey Health & Lifestyle Brands.