A pair of private equity firms is Obtain The contract research organization (CRO) Parexel spent US$8.5 billion, the latest in a series of transactions involving companies in the life sciences sector.
EQT Private Equity and the private equity businesses of Goldman Sachs Asset Management announced the acquisition agreement on Friday. The transaction was four years after Parexel was acquired by Pamplona Capital Management Company for approximately US$5.5 billion and privatized the then publicly traded CRO.
Parexel has dual headquarters in Durham, North Carolina and Newton, Massachusetts. It is a supplier of pharmaceutical and biotechnology companies, conducting clinical trials and providing other services that support the testing of experimental drugs and medical devices, regulatory documents for these products, and Their commercialization.
Although the CRO industry is growing steadily, the industry stagnated last year due to the pandemic that stopped many clinical trials. In announcing the acquisition of Parexel, EQT and Goldman Sachs cited Parexel’s role in the industry’s shift to decentralized clinical trials that use various technologies to enable research to run remotely. The two companies also noted Parexel’s role in improving the diversity of clinical trials, as the CRO aims to ensure that these studies better reflect the patient population the drug or device will serve.
“We believe that this investment will accelerate Parexel’s growth because it is built on the company’s global footprint, strong operational capabilities, and extensive healthcare network,” said Eric Liu, EQT Partners and Co-Head of Global Healthcare Said in a prepared statement.
The Parexel acquisition is not entirely surprising.Bloomberg Report In April, Pamplona was exploring the transaction of its CRO assets, whether it was an IPO or a sale to another company. Bloomberg’s unnamed source said that Parexel’s annual sales are approximately $450 million. Among the top 10 CROs, this number puts the company in the middle.
Bloomberg’s report was a week later Thermo Fisher Scientific announces that it will spend 21 billion US dollars to acquire PPD, A publicly traded CRO, reported revenue of $4.7 billion in 2020. This transaction was carried out after the announcement of two publicly traded CROs of comparable size in February. ICON and PRA Health Sciences will merge in a $12 billion transaction And operate under the name of ICON and the management team.That deal shut down Thursday.
Parexel was founded in 1982 and is led by Jamie McDonald, who was a senior advisor to EQT before serving as Chief Risk Officer. Parexel has approximately 17,000 employees. It conducts clinical trials in more than 95 countries/regions.
EQT stated that it manages the assets of 67 billion euros in 26 funds and has been an active investor in the life sciences and health sectors. Other investments in the healthcare industry include Aldevron, a DNA plasmid supplier for cell and gene therapy; Recipharm, a contract development and manufacturing organization; and MHC Asia, a health and welfare management agency operating in Southeast Asia. EQT made a Parexel investment through its EQT IX fund. The company said that through the Parexel transaction, the fund will invest 55% to 60%.
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