INC Research Gobbles Up inVentiv Health in $4.6 Billion Deal

INC Research Gobbles Up inVentiv Health in $4.6 Billion Deal May 10, 2017
By Mark Terry, Breaking News Staff

INC Research Holdings , a contract research organization (CRO), is buying Boston, Mass.-based CRO inVentiv Health .

The two companies have inked a definitive merger agreement that values inVentiv at an enterprise value of about $4.6 billion. The combined company will have an enterprise value of approximately $7.4 billion. InVentiv is a privately held company, equally owned by Advent International and Thomas H. Lee Partners, both private equity firms. InVentiv typically works with larger companies, including the top 20 biopharmaceutical companies. INC’s clients are typically small and mid-sized pharmaceutical companies. InVentiv also has a consulting division.

Advent and Thomas H. Lee Partners will stay as investors in the merged company, and also have seats on the combined company’s board of director. Thomas H. Lee Partners bought inVentiv in 2010 for approximately $1.1 billion. In July 2016, Advent offered to acquire inVentiv when it was considering going public. Advent acquired its stake in inVentiv in November, which valued the company at $3.8 billion on a cash-free, debt-free basis.

Once the deal is closed, INC Research shareholders will own about 53 percent of the company, and inVentiv shareholders will own approximately 47 percent.

The merger will create the second largest biopharma outsourcing provider, making it a Top 3 CRO and leading Contract Commercial Organization (CCO). It will have more than 22,000 staffers in more than 60 countries, and serve clients in more than 110 countries.

“Today marks a significant milestone for INC Research,” said Alistair Macdonald, INC’s chief executive officer, in a statement. “Customers are increasingly seeking simultaneous approvals and product launches in multiple markets worldwide. Through this strategic combination, we are bringing together two of the most innovative and respected players in the field to create a leading global biopharma solutions organization with a full suite of clinical and commercial solutions to address the needs of biopharmaceutical companies, patients, physicians and payers. The combination of INC Research and inVentiv will expand our global scale and add capabilities to grow our addressable market.”

The deal coincides with other CROs possibly up for sale. Privately held UK CRO, Chiltern International, is considering a sale, and Wilmington, NC-based Pharmaceutical Product Development (PPD) hired Goldman Sachs Group, JP Morgan Chase & Co., and Centerview Partners in December to evaluate a potential sale. Waltham, Mass.-based Parexel International announced an extension of its restructuring plans today, with expectations of laying of 1,100 to 1,200 job cuts worldwide, possibly in anticipation of a sale.

After the INC and inVentiv deal closes, Alistair Macdonald will serve as chief executive officer of the merged company. Greg Rush will act as chief financial officer. Michael Bell will be executive chairman. The board of directors will have 10 directors, five designated by INC Research, including Alistair Macdonald, and five designated by inVentiv, including two designated by Advent International, and two directors designated by Thomas H. Lee Partners.

The merged company will be headquartered in Raleigh, NC with operations worldwide, including Asia and Europe.

“As biopharmaceutical companies of all sizes face increasingly complex challenges to bring products to market, they are seeking comprehensive outsourced solutions across the clinical and commercial spectrum,” said Michael Bell, in a statement. “The new company is purpose-built to address market realities where clinical and commercial must work together, sharing expertise, data and insights, to improve client performance. We believe this merger has significant client advantages as it deepens our scales, scope and therapeutic expertise.”

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