CapMan Russia announced the acquisition of 25% of Vital Development Corporation in a disclosure on the LSE. The purpose of the deal is to expand the company's production capacity, develop new products and increase its market share, the statement said.

Vital Development, by its own estimates, is the largest developer, manufacturer and supplier of reagents and analytical equipment for laboratories in Russia. Until June 14, 38% of the company was owned by its CEO Elena Schol-Engberts and Executive Director Alexander Plekhov, and another 25% was owned by Seba Trading ltd., registered in the British Virgin Islands. Currently, 100% of Vital Development shares belong to the Cypriot Lenosant Holdings Ltd. (the company does not disclose its beneficiaries). Vital Development's revenue in 2011 was 245.2 million rubles, net profit - 15.4 million rubles.

"We hope for growth in demand for domestic reagents from hospitals, clinics and state laboratories," CapMan Russia partner Alexander Vlasov explains the interest in Vital Development. According to Vlasov, these customers account for about 90% of the demand for reagents, with imports accounting for more than 50%. CapMan Russia estimates the Russian in-vitro diagnostics market at approximately $300 million, and by 2018 it could grow by 10-15%. The share of Vital Development Corporation in this market, according to the company's financial director Irina Goltseva, is about 2%.

The parties are not disclosing the amount of the deal. In April 2011, Vital Development planned to place 12 million shares (19.34% of the increased authorized capital) on the Moscow Interbank Currency Exchange based on the company's valuation of 1.7-2.6 billion rubles. At that time, it did not collect a sufficient number of applications and postponed the IPO until the fall of 2011. In October, the company again changed the placement dates - now to the first half of 2012 - due to the poor market conditions, and a month later it announced that the IPO had been postponed for an "indefinite period". The financial terms of the current and planned last year's deals are not related; the fund assessed the company independently, says Vlasov. In the current deal, the company's valuation is lower, admits Goltseva.

The products of Vital Development are not understood by a wide range of investors, so attracting the fund as an investor is the best option for the company for the next two to three years, says Maxim Dremin, Deputy General Director of Alor Invest. CapMan Russia does not have a strict deadline for exiting Vital Development's capital, says Vlasov.

Vital Development sold 25%