Quintiles halts financing plan after market becomes ‘unfavourable’

US CRO Quintiles has postponed a financing plan it announced earlier this month, citing unfavourable global credit market conditions as the reason for the decision.

The comments are in direct contrast with those Quintiles made when, on March 10, it unveiled plans to set up a new $2.425bn (€1.7bn) credit facility to pay back debt of $1.7bn.

At the time the contract research organisation (CRO) said that: “Current financing terms are attractive, and banks are looking to invest in the right companies.”

The firm also said that the remaining funds could be used for a range of corporate purposes, including potential acquisitions, the formation of strategic partnerships and investments.

Now however conditions have changed. Spokesman Phil Bridges told Outsourcing-pharma.com that: "The postponement is taking place not because of Quintiles’ performance or how the credit markets view us. In simple terms, this was not a deal Quintiles needed to do, by any means. It simply would have yielded financing terms that were advantageous to Quintiles.

"In the first quarter of 2011, global credit markets were strong and favorable credit terms became available to Quintiles. It was these favorable credit markets which prompted us to announce our most recent refinancing plans on March 8th.

"However, since those refinancing plans were announced, global events have caused global credit markets to tighten up significantly. This tightening of credit markets has resulted in less favorable credit terms, and made Quintiles’ refinancing plans less advantageous at this time.

The privately-held firm’s parent company, Quintiles Transnational Holdings, also said it has terminated the $525m tender offer it made for 9.5 per cent of Quintiles senior notes also citing prevailing market conditions.

But, while the various financing moves are on hold for now, Quintiles may still be in the market for more strategic deals and acqusitions according to Bridges.

"We talked generically about how some of the proceeds might be used including acquisitions, strategic partnerships and investments. The fact that we’re postponing the refinancing will not change Quintiles’ strategy of building sustained growth. Our business model is based on creating strategic partnerships with customers, and we continue to do that.

"We continue to evaluate acquisition candidates as well as we plan to grow our business around the world both organically and inorganically. This postponement will not keep us from partnering, investing, making deals with customers."