Exclusive: Advent, CVC bid for inVentiv ahead of IPO: sources

(Reuters) - Buyout firms Advent International and CVC Capital Partners have made offers to acquire inVentiv Group Holdings, a pharmaceutical research firm seeking to go public at a valuation of over $4 billion including debt, people familiar with the matter said.

The bids illustrate the private equity sector’s insatiable appetite for contract research organizations such as inVentiv, which have benefited in recent years from the pharmaceutical companies’ drive to cut costs, reduce clinical trial times and expand their research and development presence around the world.

Thomas H. Lee Partners, the private equity firm that owns inVentiv, will decide by next week whether to press ahead with an initial public offering (IPO) for inVentiv or agree to an outright sale of the company with one of the two private equity firms, the people said on Wednesday.

If Thomas H. Lee Partners sticks with inVentiv’s IPO plans, the company is expected to go public in August, the people added.

The sources asked not to be identified because the negotiations are confidential. Advent and Thomas H. Lee declined to comment, while inVentiv and CVC did not immediately respond to requests for comment.

Thomas H. Lee’s decision on whether to sell or take inVentiv public comes as the IPO market has rebounded in recent weeks from persistent market volatility, with two of the largest IPOs of the year, those of U.S. drug manufacturing firm Patheon NV and Japanese messaging service Line Corp, taking place in July. Between them they have raised around $1.8 billion.

Acquisitions of contract research organizations by private equity firms have also continued this year, with Genstar Capital agreeing in March to sell ERT to Nordic Capital for $1.8 billion including debt.

Based in Burlington, Massachusetts, inVentiv works with life sciences companies to help them develop and market new types of drugs. It also has a consulting arm, which advises pharmaceutical companies on everything from drug pricing to public relations.

Thomas H. Lee Partners acquired inVentiv in 2010 for about $1.1 billion. Last year, InVentiv reported net revenue of $2 billion, up 10 percent from 2014. Adjusted earnings before interest, taxes, depreciation and amortization increased 35.9 percent from 2014 to $281.1 million in 2015.

Reuters reported in March that inVentiv Health was working with Credit Suisse and Morgan Stanley on a potential IPO that could raise as much as $500 million.

Reporting by Carl O’Donnell and Greg Roumeliotis in New York; Editing by Matthew Lewis