Piramal Healthcare, a pharmaceutical custom manufacturing company, has agreed to acquire Decision Resources Group (DRG), a healthcare information company of Burlington, Mass., from Providence Equity Partners for approximately $635 million.
Following the completion of the acquisition, Piramal will operate DRG as a stand-alone business, which will remain headquartered in Burlington. The company will continue to be led by current CEO Peter Hoenigsberg and the existing senior management team. The transaction is expected to close by June 30, 2012, subject to customary regulatory approvals and closing conditions.
After the sale of Piramal Healthcare’s healthcare solutions business to Abbott Laboratories in May 2010 for $3.8 billion, the company has embarked on a strategy to acquire global growth businesses with sustainable returns. Piramal selected DRG because the company provides high-quality, web-enabled research, predictive analytics via proprietary databases and consulting services to the global healthcare industry. With 20% CAGR for the last five years, it is a fast-growing company in the global healthcare information industry and projects revenues of $160 million for 2012. Forty eight of the top 50 global pharmaceutical companies are customers of DRG and it has an overall customer retention rate of 95%.
“The global healthcare industry is facing several challenges including rising research costs, lower drug approval rates, mounting regulatory pressures and increasingly complex reimbursement models. The need for specialist information is critical and the demand is growing,” said Ajay Piramal, chairman of Piramal Healthcare. “DRG’s portfolio of products is widely regarded as the gold standard of information. We will leverage our longstanding reputation and relationships with global pharma companies, our knowledge of emerging markets as well as our track record of successful acquisitions as we continue to grow further DRG’s leadership position in the healthcare information and analytics industry.”
DRG covers three market segments, which are worth approximately $2.5 billion and leaves room for the company to continue to grow its revenues. DRG’s segments are: (1) the biopharma business, which provides reports, databases and advisory services on drug utilization trends and forecasting in a variety of therapeutic areas; (2) the market access business, which provides database and analytical services that healthcare companies use to assess the current and future opportunity of their products’ acceptance into a market; and (3) the medical technology business, which provides actionable insights and data on the medical device markets. DRG’s products include detailed market assessments based on a specialized network of over 125,000 healthcare professionals (primarily physicians), proprietary databases of market information and detailed analytical reports on specific therapeutic areas.
Barclays is acting as lead financial advisor to DRG with Oppenheimer & Co. acting as co-advisor, and Weil Gotshal & Manges, LLP acting as legal advisor.