US-based bio/pharmaceutical services organisation Parexel International has beefed up its regulatory support capabilities by acquiring Liquent Inc for around US$72 million.

Operating out of Horsham, Pennsylvania in the US, and with additional offices in the UK, Germany and India, Liquent provides Regulatory Information Management (RIM) solutions to more than 200 biopharmaceutical and life sciences companies worldwide.

Its offering includes an integrated platform of software solutions for regulatory submissions and product registration management, as well as a range of complementary business-process outsourcing capabilities.

With a current staff of nearly 300, Liquent was founded in 1994. Parexel takes over ownership of the regulatory specialist from Marlin Equity Partners.  

The purchase price of around US$72 million was adjusted at closing to reflect Liquent’s cash, indebtedness and working-capital balances as of that date. Parexel funded the acquisition by expanding one of its existing credit facilities.

Comprehensive InSight

According to Parexel chairman and chief executive officer Josef von Rickenbach, Liquent’s flagship software platform, InSight, will give Parexel’s clients access to “comprehensive regulatory-agency submission planning, viewing, tracking, publishing, and registration management throughout the entire lifecycle of a medicinal entity”.

The new offering will not only enhance the products and services delivered through Parexel’s Perceptive Informatics unit, it should also benefit the company’s Consulting and Medical Communications Services business, “where we will be able to leverage Liquent’s significant expertise in regulatory information-management outsourcing through its Liquent Direct solutions”, von Rickenbach noted.

Financial impact

The Liquent acquisition is expected to contribute a “small amount” of service revenue to Parexel in the second quarter of fiscal year 2013, and between $US17 million and US$23 million of revenue during the second half.  

The impact on earnings per share (EPS) under Generally Accepted Accounting Principles (GAAP) should be dilutive to the tune of US$0.02 to US$0.04 for fiscal year 2013, including the amortisation of intangibles and other costs, Parexel believes. Excluding these elements, the deal is expected to be accretive to EPS.

New guidance

Parexel has revised its financial guidance for the second quarter of FY 2013 (ended 31 December 2012) and for the full fiscal year (ending 30 June 2013) to take account of the Liquent acquisition and other factors.

These factors include accelerated project performance, offset by delays in client decision-making that are likely to mean softer new-business wins during the second quarter of FY 2013, and a shift in pending requests for proposals into the third quarter.

The company is now projecting consolidated service revenue in the range of US$415 million to US$420 million for the second quarter of fiscal year 2013. Service revenue for the whole of FY 2013 is expected to reach US$1.675 billion to US$1.695 billion.

Previously issued guidance for consolidated service revenue was US$400-US$410 million for the second quarter and US$1.630 billion to $1.660 billion for the whole of fiscal year 2013.

Parexel is forecasting GAAP diluted earnings per share of US$0.33 to US$0.34 for the second quarter of FY 2013 and of US$1.32 to US$1.39 for the full year.

The previously issued guidance was for GAAP EPS of US$0.31 to US$0.33 for the second quarter and of US$1.30 to US$1.40 for the whole of fiscal year 2013.