Blog Coverage: INC Research Holdings Acquires Privately Held inVentiv Health

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LONDON, UK / ACCESSWIRE / May 11, 2017 / Active Wall St. blog coverage looks at the headline from Raleigh, North Carolina based INC Research Holdings, Inc. (NASDAQ: INCR) as the Company announced on May 10, 2017, that it has signed a contract to acquire privately held and Boston, Massachusetts based inVentiv Health, Inc. The merger of the two Companies would create the second largest biopharmaceutical outsourcing Company with a combined enterprise value of approximately $7.4 billion and combined net revenue of over $3.2 billion. Register with us now for your free membership and blog access at:

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One of INC Research Holdings’ competitors within the Research Services space, QIAGEN N.V. (NASDAQ: QGEN), reported on May 02, 2017, its results for Q1 2017. AWS will be initiating a research report on QIAGEN in the coming days.

Today, AWS is promoting its blog coverage on INCR; touching on QGEN. Get all of our free blog coverage and more by clicking on the link below:

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INC Research is a leading global contract research organization (CRO) that offers the entire range of clinical development services from Phase I – IV to biopharmaceutical and medical device Companies.

inVentiv Health is a CRO and Contract Commercial Organization (CCO) that provides contract drug development services to pharmaceutical, biotechnology, generic drug, and medical device Companies.

Commenting on the acquisition, Alistair Macdonald, CEO of INC Research, said:

“Through this strategic combination we are bringing together two of the most innovative and respected players in the field to create a leading global biopharma solutions organization with a full suite of clinical and commercial solutions to address the needs of biopharmaceutical Companies, patients, physicians, and payers. The combination of INC Research and inVentiv will expand our global scale and add capabilities to grow our addressable market.”

Details of the merger agreement

The Boards of Directors of both Companies have approved the deal. The transaction is expected to close in H2 2017 and is subject to expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 as well as regulatory approvals and other closing conditions.

The exact financial details of the stock swop were not revealed. However, once the transaction is completed, the shareholders of INC Research will own approximately 53% stake and shareholders of inVentiv will own approximately 47% stake in the newly merged Company. Two private equity firms are currently equal equity owners of inVentiv, and they are Advent International and Thomas H. Lee Partners. These two equity forms will continue to be invested in the newly merged Company. Certain debts incurred as a part of the merger agreement will be refinanced. The Companies have got financial commitment from Credit Suisse to finance the transaction.

Once the transaction is completed, the newly merged Company will be led by Alistair Macdonald as the CEO and Greg Rush as the CFO. The Board of Directors of the new Company will be headed by Michael Bell who will be the Executive Chairman. The Board shall consist of a total of 10 members of which five members will be from INC Research and five members will be from inVentiv. Of the five members from inVentiv, Advent International and Thomas H. Lee Partners will nominate two directors each.

The newly merged Company will be headquartered in Raleigh, North Carolina and apart from significant presence in Northeast corridor of US, it will also have presence across the globe including in Asia and Europe.

Advantages of the merger

The merger will create a global leader in Phase I–IV clinical development, and the combined Company will become one of the Top 3 CROs globally. INC Research believes that the newly merged Company will be the No. 2 provider of overall services and will rank No. 1 provider of commercial services for the biopharmaceutical industry.

The newly merged Company will be able to capitalize on the increasing global demand for outsourced services. The clients will be able to benefit from a comprehensive range of end-to-end outsourced solutions.

INC Research offers its services to clients in the small and mid-sized pharma Companies whereas inVentiv’s clients are mostly larger firms, including the top 20 biopharmaceutical Companies. The merger will result in a Company that services clients across the spectrum from small to large pharma Companies.

The newly merged Company will be able to expand its geographical footprint and offer its services in strategic growth areas like Asia/Pacific especially Japan.

The transaction is expected to generate approximately $100 million in annual run-rate cost synergies within three years. The transaction is also expected to be accretive to INC Research’s adjusted EPS within the first 12 months of closing. The transaction will be accretive mid to high single-digit in FY 2018 and by more than 20% from FY 2019 onwards.

The newly merged Company will have more than 22,000 employees present in over 60 countries, and will serve customers across 110 countries and more.

Stock Performance

At the close of trading session on Wednesday, May 10, 2017, INC Research’s share price finished today’s trading session at $52.80, surging 20.96%. A total volume of 4.66 million shares exchanged hands, which was higher than the 3 months average volume of 1.17 million shares. The stock is trading at a PE ratio of 26.04 and currently has a market cap of $2.75 billion.

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