Parexel’s Owner Weighs Sale of Drug-Testing Company
(Bloomberg) -- The owner of Parexel International Corp., which helps drugmakers run clinical trials, is working with an adviser on a potential sale that could value the company at several billion dollars, according to people familiar with the matter.
Private equity firm Pamplona Capital Management is also considering taking Parexel public, said one of the people, who asked to not be identified because the matter isn’t public. It has drawn takeover interest from private equity firms and other companies, the people said.
The company could seek a value of about $9 billion including debt, one of the people said.
Parexel generates about $450 million in annual earnings before interest, taxes, depreciation and amortization, one of the people said. Deliberations are ongoing and at an early stage, the people said.
“It is Parexel’s policy not to comment on specific market rumors,” Parexel said in a statement. “Our focus remains on making a difference for patients and strengthening our position as an innovative clinical development partner for our customers.”
A representative for Pamplona declined to comment.
It’s another sign of how attractive companies that contract research and testing for drugmakers have become. The firms -- referred to as contract research organizations, or CROs -- help run the crucial studies that get experimental drugs and treatments to market.
Last week, Thermo Fisher Scientific Inc. agreed to buy PPD Inc., another provider of clinical and research services, for $17.4 billion. In February, Icon Plc agreed to acquire PRA Health Sciences Inc. in a contract-research deal valued at about $12 billion.
Parexel agreed to be taken private by Pamplona in 2017 for about $4.5 billion after activist investor Starboard Value LP urged the company to improve its margins and seek potential buyers.
In October, Parexel said it had entered into a strategic collaboration with Synairgen Plc, a developer of an experimental drug aimed at treating the worst symptoms of Covid-19, to conduct a study of a treatment for patients hospitalized with the coronavirus.
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