Since being bought by private equity in 2010, inVentiv, like its peer INC Research, has looked to acquisitions to give it the scale to compete with the top CROs (contract research organisations).
"The acquisition of PharmaNet positions us among the top global CROs, increasing our capabilities, adding new expertise in every phase of clinical development, and strengthening our impressive client base and strong management team”, said Paul Meister, CEO of inVentiv.
Buying New Jersey-based PharmaNet swells staffing at inVentiv Clinical to more than 6,000, with a further 7,000 working at the Commercial and Consulting units, and gives it a presence in close to 40 countries.
inVentiv believes this scale and geographic reach, gained by adding i3 and PharmaNet to its existing capacity, allows it to “participate in strategic alliances of any size”. Like INC, which is buying Kendle, inVentiv is targeting biopharm looking to slash fixed costs through outsourcing.
"In the evolving global market, scale is a key competitive advantage to developing strategic relationships with our clients. This acquisition allows us to achieve critical scale”, said Meister.
Integration and emerging markets
PharmaNet has a number of offices in Asia and Central and Eastern Europe, and these complement the Latin American sites gained by buying i3. About half of PharmaNet’s revenue is generated outside the US.
The challenge now is to integrate PharmaNet and i3, as well as biopharm consultancy Campbell Alliance, into operations. Jeffrey McMullen, the current president and CEO of PharmaNet, will lead the CRO unit at inVentiv and as such play a central role in the integration process.
"In the day-to-day operations, little will change. We will continue to provide the same level of exceptional service that our clients have come to expect of us", said McMullen.
Exit strategy
inVentiv is to buy PharmaNet from JLL Partners, a private equity firm that acquired the CRO in 2009. Since JLL bought PharmaNet a number of other private equity firms have moved for CROs, including inVentiv, and as an early mover provides a view of a possible growth and exit strategy.
“We have worked…to drive operational efficiencies, outstanding new business momentum and the highest EBITDA (earnings before interest, taxes, depreciation, and amortization) levels in the company's history", said Ramsey Frank, a partner at JLL.
Outsourcing-Pharma reported on the trend for private equity firms to buy CROs and possible exit strategies in an article earlier this month.
The acquisition of PharmaNet is subject to closing conditions and is expected to close on June 30. Financial details of the deal have not been disclosed.