Small and medium-sized contract research organisations (CROs) continue to look to private equity for support as the market shakes out under the influence of large-scale strategic outsourcing.
US-based CRO Medpace, which completed two acquisitions last year, has announced plans for an “equity recapitalisation” with affiliates of CCMP Capital Advisors, under which CCMP will end up with an 80% stake in the company while the remaining 20% share will belong to the current Medpace management team.
No financial details were released on the deal, which Medpace expects to finalise in June 2011, although press reports put the value of the transaction at around US$500 million.
The existing Medpace management will remain in place, as will August Troendle as president and chief executive officer. Medpace will also continue to operate out of Cincinnati, Ohio once the recapitalization is completed.
Long-term investments
According to Medpace, its relationship with CCMP will allow the CRO to “add global operational depth” and to further its reputation as “a company well known for therapeutic and operational excellence” in conducting Phase I-IV clinical studies.
“The transaction will provide resources to make the strategic long-term investments that are needed to advance our leadership position, grow the core business, and expand our global reach,” commented Troendle.
Medpace has more than 1,000 employees and clinical trial experience in over 40 countries.
As well as Phase II-IV development services, the CRO provides Phase I/ IIA clinical services through Medpace Clinical Pharmacology; central laboratory and therapeutically specialised testing through Medpace Reference Laboratories; bioanalytical services through Medpace Bioanalytical Laboratories; centralised imaging core laboratory management and reading through Imagepace; and medical device development through Medpace Medical Device.
The last of these segments was boosted last March by the acquisition of US-based specialist Symbios Clinical, while in January Medpace raised its European profile by snapping up Medical Consulting Dr Schlichtiger, a CRO based in Germany with particular expertise in regulatory and drug safety.
Companies in the contract research sector that have resorted to private equity backing in recent years include Omnicare Clinical as well as soon-to-merge InVentiv Health and PharmaNet in the US, and Phlexglobal, ClinTec and Premier Research Group in the UK.
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