Blackstone Invests in Dallas-based LifeScience Logistics as the 3PL Leader Ramps Up in Pharma and Medical Device Market

LifeScience Logistics founder Richard Beeny calls the demand for FDA-compliant healthcare supply chain solutions “unrelenting.” The third-party healthcare logistics provider, which has more than 4-million-square feet of space in locations across nine states, has seen exponential growth since launch in 2006.

LSL is in the sweet spot of Blackstone's "highest-conviction, firmwide investment themes": life sciences innovation and next-gen logistics.

Dallas-based LifeScience Logistics is getting a “significant, strategic investment” from Blackstone to help accelerate its expansion in the pharmaceutical and medical device market. The investment, made through Blackstone Tactical Opportunities, aims to speed LSL’s growth as the company opens new facilities and increases its customer base in the years ahead, Blackstone announced today.

LSL, a leading healthcare logistics provider, is at the “intersection of two of Blackstone’s highest-conviction, firmwide investment themes: rapid advancement of life sciences innovation and next-generation logistics,” the global investor said in a statement.

The current environment clearly demonstrates a “critical need for resilient, high-quality healthcare supply chain solutions,” Blackstone’s Global Head of Healthcare Ram Jagannath and Senior Managing Director Todd Hirsch said.

Founded in 2006, fast-growing LSL now has 600 employees and over 4 million square feet of warehousing and logistics space across nine states, stretching from Dallas to New York to Seattle and other major hubs. With a headquarters at DFW Airport, the company serves governments, global pharmaceuticals, biotech companies, and medical device providers to deliver end-to-end supply chain solutions and emergency preparedness infrastructure services across the U.S.

The next phase of expansion

Now, LSL is ramping up for its next stage of expansion using Blackstone’s global scale, resources, and operational expertise to speed its strategic growth

LSL Founder and CEO Richard Beeny said the company has seen “exponential growth from coast to coast.” The CEO credits what he calls the “unrelenting demand for high-quality, flexible, FDA-compliant healthcare supply chain solutions in recent years.”

“With Blackstone’s investment and partnership, we’re thrilled to see what the future will hold and to bring their deep resources to bear for our customers,” he said in a statement.

Expanding for a booming demand 

The demand for temperature-controlled storage and distribution of pharmaceutical and medical devices is on the rise. LSL facilities include 12 controlled-temperature (20-25 degrees Celsius) and cold chain (2-8 degrees Celsius) storage and distribution locations across the U.S.

The need for storage and distribution services driven by COVID-19 and injectable drugs with “live” particulates that require extreme freezes to preserve vaccine integrity and the speed with which new FDA-approved pharmaceutical and medical devices are being brought to market are primary drivers, Beeny notes.

“We’ve watched the consolidation of 3rd-party logistics providers across our industry and are proud to be the last and leading independent standing in a sea of middle-market demand, the CEO said in a statement earlier this fall. “Our clients are saying ‘please build it, we need more.'”

“We want to be their ‘Easy’ button,” the CEO said in October as the company announced back-to-back expansions.”

In September, the company acquired a 132,000 sq. ft. mixed-use facility in Research Triangle Park. On the heels of that news in October, the company announced its third LSL multi-client, controlled-temperature/cold storage facility in the Indianapolis area. Both are slated to open in early 2022 and together, will create 100 to 200 new jobs.

Exacting standards in temperature control storage

Beeny said the facility in the Research Triangle is being rebuilt to LSL’s controlled-temperature and cold chain storage and distribution specification.

The standards are “extremely high,” Beeny says.

“Healthcare logistics is all we do—and we believe that shows in everything we do, from training to operations. We’re proud to say that our manufacturing clients have grown to expect that quality and attention to regulatory and compliance standards from us,” the CEO said at the time.

Blackstone Tactical Opportunities Investment

Blackstone’s tactical opportunities business is basically a joint venture across Blackstone’s business units, the global investor says.

Blackstone’s Jagannath and Hirsch are “excited to partner with Beeny and his team as they embark on their next stage of expansion,” calling LSL a leader in the sector.

The terms of the transaction were not disclosed. UBS Investment Bank was the exclusive financial advisor and McDermott, Will & Emory was legal counsel to Life Science Logistics. Jefferies and Morgan Stanley & Co. LLC were financial advisors and Simpson Thacher & Bartlett LLP and Sidley Austen LLP were legal advisors to Blackstone.

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