Cinven confirms $915 mln Medpace buyout

LONDON Mon Feb 24, 2014 6:43am EST

LONDON Feb 24 (Reuters) - Cinven Ltd is to buy pharmaceutical contract research company Medpace Inc for $915 million from CCMP Capital Advisors LLC, providing more evidence of the sector's attractions for private equity.

Private equity firm Cinven confirmed the purchase of Ohio-based Medpace in a statement on Monday. Reuters had reported the deal on Sunday.

The pharmaceutical contract research sector is growing thanks to drug firms' increasing need to outsource clinical studies to cut costs, reduce trial times and expand their global research and development. Analysts estimate that currently only about half of R&D is outsourced, leaving room for the contract sector to grow.

Other leveraged buyouts in the sector have included the $3.9 billion acquisition of Pharmaceutical Product Development Inc by Carlyle Group LP (CG.O) and Hellman & Friedman LLC in 2011, and the $1.1 billion takeover of inVentiv Health Inc by an investor group led by Thomas H. Lee Partners LP, also in 2011.

Cinven had lost out in 2013 to rival private equity group KKR & Co LP in a deal to buy another company in the sector, U.S.-based trials firm PRA International.

Medpace employs 1,500 people in over 45 countries, generating $94 million adjusted core earnings in 2013. Cinven said it was particularly attracted by Medpace's strong presence in Europe and Asia.

A source familiar with the matter said the offer was for an 80 percent stake in the company, and would be paid for with a mixture of fully-underwritten debt and equity. The source declined to give further details.

Barclays and Wells Fargo Securities LLC advised Cinven on the deal. Medpace was advised by Jefferies LLC and Fairmont Partners.

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