River Medical

Avalon invested in River Medical, whose founder invented an elegantly clever, non-electronic device to deliver a steady stream of intravenous (“IV”) fluids. While this product was in development, Eli Lilly indicated its desire to divest itself of non-core pharmaceutical businesses.  One of these, IVAC Corporation, was a San Diego-based leading manufacturer of electronic IV systems.  Donaldson Lufkin and Jenrette Merchant Banking (“DLJ”) approached River to be the management core for a leveraged buy-out (“LBO”) of IVAC Corporation, which DLJ and Chase would finance.  The LBO for $180 million was completed and within ten months, the successor company, named IVAC, was sold to IMED for cash, which provided Avalon an exceptional return in 20 months.