inVentiv Health, the US-based provider of clinical development, commercialisation and consulting services to the pharmaceutical and healthcare industries, has continued on its acquisition trail with a definitive agreement to take over fellow US company PharmaNet Development Group.

The deal, which inVentiv says will put it among the top ranks of global contract research organisations (CROs), comes just a few months after the company acquired the i3 clinical development businesses of Ingenix for around US$400 million as well as specialist management consulting firm Campbell Alliance.

No financial terms were disclosed for the agreement with PharmaNet, which provides global drug development services to the pharmaceutical, biotechnology, generic drug and medical device industries. Jeffrey McMullen, president and chief executive officer (CEO) of PharmaNet, will now head up InVentiv’s accumulated CRO businesses.

Private equity backing

As well as a declared customer-centric approach and particular expertise in oncology, rheumatology and neuroscience as well as clinical technologies, one thing inVentiv and PharmaNet share is a recourse to private equity.

In February 2009, PharmaNet ended a rough financial patch by agreeing to a merger with affiliates of private equity firm JLL Partners, which valued PharmaNet’s common stock at around US$100 million.  

Since then, said partner Ramsey Frank, JLL has “worked in close partnership with the [PharmaNet’s] management team to drive operational efficiencies, outstanding new business momentum and the highest EBITDA [earning before interest, taxes, depreciation and amortisation] levels in the Company’s history”.

For its part, InVentiv Health was acquired by private equity firm Thomas H Lee Partners for around US$1.1 billion in May 2010. It then snapped up the i3 clinical development businesses and Campbell Alliance last January, as well as re-organising into three self-standing operating segments, Clinical, Consulting and Commercial.

Global reach

With the acquisition of PharmaNet, the three divisions now encompass 13,000 employees and an expanded global presence in nearly 40 countries, including the emerging markets of Asia, Latin America and Central/Eastern Europe.

More than 6,000 of those employees will be working in clinical research, where inVentiv says the addition of PharmaNet will “greatly enhance” both its early- and late-stage development capabilities.

“One of our key strategic objectives is to be recognised as the leader in every segment where we serve our clients,” commented Paul Meister, CEO of inVentiv Health. “The acquisition of PharmaNet positions us among the top global CROs, increasing our capabilities, adding new expertise in every phase of clinical development, and strengthening our impressive client base and strong management team.”

Around half of PharmaNet’s revenue is generated outside the US. “In the evolving global market, scale is a key competitive advantage to developing strategic relationships with our clients,” Meister noted. “This acquisition allows us to achieve critical scale while providing enhanced services to our clients any time they need them, anywhere in the world.”

The InVentiv-PharmaNet deal is subject to the usual closing conditions and is expected to be completed on or around 30 June 2011.