Capital Management nears deal to buy Parexel: source
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[June 20, 2017] By
(Reuters) - Private
equity firm Pamplona Capital Management LLP is nearing a deal to acquire
U.S. pharmaceutical research services provider Parexel International
Corp for more than $4.5 billion, a person familiar with the matter said
Activist investors, including Starboard Value LP, have put pressure
on Parexel to explore a sale, arguing that the company's profit
margins have consistently lagged those of its peers.
The deal will be announced later on Tuesday, the source said.
Pamplona is set to pay $88.10 per share in cash for Parexel, the
Wall Street Journal reported earlier on Tuesday. Parexel shares
ended trading on Monday at $83.92.
The source asked not to be identified because the negotiations are
confidential. Parexel and Pamplona did not immediately respond to
requests for comment.
Headquartered near Boston, Massachusetts, Parexel provides a range
of services to the pharmaceutical industry, ranging from drug
development and regulatory consulting, to clinical pharmacology,
clinical trials management, and reimbursement.
The company has leadership position in cancer drug research, and a
top platform for so-called 'real-world' data, which can be used to
assess the economic value of medicines and is sought after by drug
makers looking to justify their prices to healthcare payers.
Pamplona has been scouring the market in the last year seeking to
acquire a contract research organization. It made an unsuccessful
bid earlier this year for Pharmaceutical Product Development LLC (PPD),
a U.S. clinical trials firm valued at more than $9 billion.
Overall, the contract research industry has benefited
from the pharmaceutical companies' drive to cut costs, reduce
clinical trial times and expand their research and development
presence around the world.
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Many companies in the sector are now turning to dealmaking, as they
seek to boost their real-world data gathering capabilities.
Last month, INC Research Holdings Inc agreed to merge with inVentiv
Health Inc in a $4.6 billion deal.
Last year, contract researcher Quintiles Transnational Holdings Inc
completed a $9 billion merger with IMS Health Holdings Inc.
(Reporting by Carl O'Donnell in New York; Additional reporting by
Michael Flaherty and Greg Roumeliotis in New York and Subrat Patnaik
in Bengaluru; Editing by Adrian Croft)
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