INC Research Holdings, a global phase I–IV CRO, and inVentiv Health, a privately held, global CRO and Contract Commercial Organization (CCO), have announced that their Boards of Directors have unanimously approved a definitive merger agreement pursuant to which their businesses would combine in an all-stock transaction, creating a global biopharmaceutical solutions organization.
Based upon the closing price of INC Research common stock on Tuesday, May 9, 2017, the transaction values inVentiv at an enterprise value of approximately $4.6 billion, and the combined company at an enterprise value of approximately $7.4 billion.
Upon closing of the transaction, INC Research shareholders are expected to own approximately 53% and inVentiv shareholders are expected to own approximately 47% of the combined company on a fully diluted basis. Advent International and Thomas H. Lee Partners, two preeminent private equity firms, are currently equal equity owners of inVentiv and will remain investors in the combined company upon closing of the merger.
The announcement creates:
Upon completion of the transaction the combined company will leverage commercial insights to inform the clinical trial process, designing studies to be more efficient and effective to address evolving patient and payer needs. Commercial solutions informing accelerated clinical trial design include market access, data-driven Real World Evidence (RWE), advocacy relations and medical affairs. The new organization’s combined clinical scale, therapeutic depth and expertise will allow it to partner with biopharmaceutical companies of all sizes to navigate an increasingly complex biopharmaceutical development and commercialization environment.
Alistair Macdonald, chief executive officer of INC Research, said, “Today marks a significant milestone for INC Research. Customers are increasingly seeking simultaneous approvals and product launches in multiple markets worldwide. Through this strategic combination we are bringing together two of the most innovative and respected players in the field to create a leading global biopharma solutions organization with a full suite of clinical and commercial solutions to address the needs of biopharmaceutical companies, patients, physicians and payers. The combination of INC Research and inVentiv will expand our global scale and add capabilities to grow our addressable market.”
He continued, “Both companies have a history of successfully integrating acquisitions, and I am confident that we will capitalize on the many opportunities this combination creates for all stakeholders. We look forward to working closely with the talented inVentiv employees, who share our dedication to making the world a better place by bringing new therapies to patients, while building significant value for our shareholders.”
Michael Bell, chief executive officer of inVentiv Health, said, “As biopharmaceutical companies of all sizes face increasingly complex challenges to bring products to market, they are seeking comprehensive outsourced solutions across the clinical and commercial spectrum. The new company is purpose-built to address market realities where clinical and commercial must work together, sharing expertise, data and insights, to improve client performance.”
He continued, “We believe this merger has significant client advantages as it deepens our scale, scope and therapeutic expertise. The combination also provides the opportunity to leverage INC Research’s Trusted Process—a proven methodology to accelerate success—which can improve the overall cost of development and time to market for our customers. We have long-admired INC Research, and this is an exciting opportunity to bring together two best-in-class, industry-leading teams who share the commitment to shorten the distance from lab to life.”
Benefits of the Merger
Management and Headquarters
Following the close of the transaction, Alistair Macdonald will serve as chief executive officer of the combined company, with Greg Rush serving as chief financial officer and Michael Bell serving as executive chairman. The Board of Directors of the combined company will consist of 10 directors, with five directors designated by INC Research, including Alistair Macdonald, and with five directors designated by inVentiv, including two directors designated by Advent International, two directors designated by Thomas H. Lee Partners, and Michael Bell serving as executive chairman of the Board. The global organization will be headquartered in Raleigh, North Carolina, with a significant presence in the Northeast corridor of the United States, and operations worldwide, including in Asia and Europe.
Additional Transaction Details
The companies intend to refinance certain debt in connection with the merger. Credit Suisse has provided committed financing for the transaction.
The transaction, which is expected to be completed in the second half of 2017, is subject to, among other things, approval by INC Research shareholders, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the satisfaction of other regulatory requirements and other customary closing conditions.