(Reuters) - Syneos Health Inc SYNH.O, a U.S. contract research organization (CRO) that serves the pharmaceutical industry, is exploring a sale, people familiar with the matter said on Monday.
A deal for Syneos would be the latest in string of acquisitions of CROs, which have benefited in recent years from pharmaceutical companies’ drive to cut costs, reduce clinical trial times and expand their research and development presence around the world.
Syneos is working with investment bank Centerview Partners on soliciting acquisition offers from other companies and private equity firms, the sources said.
The sources cautioned that a deal is not certain and asked not to be identified because the matter is confidential. Syneos declined to comment, while Centerview did not respond to a request for comment.
Syneos shares were trading down 30% because of the stock market rout before the Reuters story on Monday, but jumped on the news of the possible sale to trade up 1.7% at $65.60, giving it a market value of close to $7 billion. Syneos also had a debt pile of $2.7 billion as of the end of December.
Several drugmakers have pledged to research vaccines and therapeutics to combat the global coronavirus outbreak, suggesting than even in the event of a global economic slowdown, the demand for pharmaceutical services will remain strong.
Based in Morrisville, North Carolina, Syneos specializes in helping companies with late-stage clinical trials. It was created by the merger of INC Research Holdings Inc and inVentiv Health in 2017.
Dealmaking has been vibrant in the sector. IQVIA Holdings Inc IQV.N, a potential bidder for Syneos, is itself the product of the merger between Quintiles and IMS Health in 2016.
Private equity firms have also been active acquirers of CRO. For example, PRA Health Inc PRAH.O, another potential bidder for Syneos, was acquired by buyout firm KKR & Co Inc KKR.N in 2013 and taken public the following year.
Two private equity firms, Advent International Corp and Thomas H. Lee Partners, retain minority stakes in Syneos as a result of their previous ownership of inVentiv.
Reporting by Rebecca Spalding and Greg Roumeliotis in New York; Editing by Chizu Nomiyama and Matthew Lewis
Our Standards: The Thomson Reuters Trust Principles.