INC Research Holdings, which has spent the past two decades acquiring 10 companies, has announced plans for an initial public offering expected to raise $150 million.
Based in Raleigh, N.C., the CRO is focused on phase I to phase IV clinical development services for the biopharmaceutical and medical device industries. With approximately 5,400 employees in 50 counties across six continents, INC Research’s therapeutic expertise includes central nervous system, oncology and other complex diseases.
The IPO announcement, made after the stock market closed Monday, comes nearly one month after large CRO PRA Health Sciences (formerly PRA International) filed for its IPO with the Securities and Exchange Commission with plans to raise $375 million.
“We’re in a strong market for IPOs and particularly strong for CROs,” said Michael Martorelli, a director at Fairmount Partners. “It’s a nice convergence to have both.”
The $150 million target for INC Research’s public offering is based on a registration fee and is expected to differ from the eventual offering, as the company has not yet revealed how many shares it plans to sell or the target price range per share.
Currently, INC Research is owned by private equity group Avista Capital Partners and affiliates of the Ontario Teachers’ Pension Plan, the largest single professional pension plan in Canada. They reportedly spent $600 million to acquire INC Research four years ago from Crosspoint Venture Partners and Adams Street Partners.
“What’s good about seeing PRA and now INC Research planning to become publicly traded companies is that these big firms provide more transparency for the industry,” said Martorelli. “They will be able to use stock for acquisitions instead of cash and join other publicly held CROs, like Quintiles, which went public last year.”
In its SEC filing, INC Research reported $652.4 million in revenue last year, but has lost money over the last several years including $41.5 million in 2013. For the first half of this year, the company posted net income of $13.5 million and a 26% jump in revenues to $388 million.
The company also stated its broad global reach has enabled it to provide clinical development services in over 100 countries.
“Our global footprint provides our customers with broad access to diverse markets and patient populations, local registry expertise and local market knowledge,” INC Research stated in its SEC filing. “We have developed our capabilities and infrastructure in parallel with our extensive industry-leading relationships with principal investigators and clinical research sites, as demonstrated by our ranking as the ‘Top CRO’[to Work With] in the 2013 CenterWatch Global Investigative Site Relationship Survey, which was conducted by CenterWatch, a third-party leading publisher in the clinical trials industry.”
Should the IPO be successful, INC Research would trade on the Nasdaq under the symbol INCR.