Global Clinical Research Firm Parexel to Be Acquired for $8.5 Billion

Paraxel_Peter Macdiarmid/Getty Images

Peter Macdiarmid/Getty Images

Global clinical research organization PAREXEL International has agreed to be taken over from Pamplona Capital Management for $8.5 billion. Upon completion of the merger, Parexel will be owned by EQT IX Fund and the private equity business within Goldman Sachs Asset Management. 

Parexel is dually headquartered in Newton and Durham, North Carolina and specializes in developing new innovations in medicine to improve patient health. It engages in decentralized clinical trials, regulatory consultations, and leveraging insights from data. The definitive agreement is still subject to compliance conditions and other customary factors. 

The merger with EQT, a global purpose-driven investment firm, adds to Parexel's pharmacological research capabilities. EQT has over € 67 billion (approx.. $79.2 billion) in assets under management spread out across 26 active funds. Its holdings have portfolios in the Americas, the Asia-Pacific, and Europe, with total sales logged at around €29 billion as of 31 March 2021. 

The other company involved in the deal, Goldman Sachs, oversees more than $1 trillion in assets under management. The company has invested more than $75 billion in its private equity business since its inception in 1986. 

"With the market for outsourced clinical research services anticipated to grow at a conservative CAGR of 8 to 9 percent, our focus remains on advancing and innovating Parexel to meet our customers’ needs across the evolving clinical development landscape. EQT and Goldman Sachs support this vision and are committed to investing in Parexel and our people to capitalize on this exciting market opportunity and make a difference for patients," said Jamie Macdonald, chief executive of Parexel, in a statement. 

In the same press release, Pamplona Capital Management Managing Partner John Halsted expressed how proud they are of Parexel's progress through the last four years. Halsted highlighted the company's pivotal change amid the global pandemic to create new therapies that would fight against the COVID-19 virus. The sale to EQT and Goldman Sachs is amicable. 

Talks about Parexel's sale surfaced in early 2021. Back then, it was reported that Pamplona was even considering taking the company public to raise additional funds. People close to the matter said that the company drew interest from many private equity and investment companies, possibly wanting to cash in on its growth potential in the drug development industry. Pamplona finally bought Parexel in September 2017 for around $4.5 billion, or $88.10 per share in cash. 

This is not the first time Parexel made headlines this year. In January, the company announced the separation of its Informatics and Medical Imaging business to allow both units to grow and reach their full potential independently. As part of the split, Parexel Informatics was renamed Calyx. 

In April, the company revealed that it has entered into a strategic partnership with Veeva Systems, with the goal to accelerate clinical trials using technology. As part of that deal, Parexel will standardize Veeva's clinical operations applications, including Vault Study Startup, Veeva Vault eTMF, and Vault CMS to streamline operations and make them more accessible to customers. 

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