LONDON Feb 24 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