Parexel International has acquired all of the outstanding equity securities of Liquent, a global provider of Regulatory Information Management (RIM) solutions. Liquent provides an integrated platform of software solutions for regulatory submissions and product registration management, as well as a range of complementary business process outsourcing capabilities.
Liquent’s flagship software platform, InSight, will offer Parexel’s clients comprehensive regulatory agency submission planning, viewing, tracking, publishing and registration management. It will be offered through Parexel’s Perceptive Informatics business. The company also expects the acquisition will benefit the Parexel Consulting and Medical Communications Services business.
The transaction took place Dec. 21, 2012.
Liquent was founded in 1994, and its clients include more than 200 biopharmaceutical and life sciences companies. With headquarters in Horsham, Penn., and additional offices in the U.K., Germany and India, Liquent has nearly 300 employees. Prior to the sale, Liquent was owned by Marlin Equity Partners. The purchase price was approximately $72 million (adjusted at closing to reflect Liquent’s cash, indebtedness and working capital balances at closing).
Josef von Rickenbach, chairman and CEO of Parexel, said, “The acquisition of Liquent further strengthens our regulatory capabilities by adding a robust information technology platform.”
In conjunction with the acquisition, Parexel also updated its forward-looking financial guidance for the second quarter of fiscal year 2013 (ending Dec. 31, 2012) and for the full fiscal year (ending June 30, 2013). It increased its forward-looking service revenue guidance for the second quarter as a result of accelerated project performance, and for the full fiscal year as a result of positive contributions from the Liquent acquisition as well as better overall performance.
Including these factors, Parexel anticipates reporting consolidated service revenue of $415 million to $420 million for the second quarter of FY 2013, and $1.675 billion to $1.695 billion for all of FY 2013. Of the increase, the Liquent acquisition is expected to contribute a small amount of service revenue in the second quarter and between $17 million and $23 million in service revenue during the second half of FY 2013. Previously issued consolidated service revenue guidance was $400 million to $410 million for the second quarter, and $1.630 billion to $1.660 billion for the Fiscal Year.
The Liquent acquisition is expected to have a dilutive effect on earnings per share as reported under Generally Accepted Accounting Principles (GAAP) in the range of $0.02 to $0.04 for FY 2013, including the amortization of intangibles and other costs. Excluding the amortization of intangibles and other costs, the acquisition is expected to be accretive. In addition to the impact from Liquent, Parexel expects to have slightly better operating performance. It now anticipates reporting GAAP diluted earnings per share of $0.33 to $0.34 for the second quarter of FY 2013 and $1.32 to $1.39 for FY 2013. Adjusted earnings per diluted share are expected to be between $1.36 and $1.43 for FY 2013 (adjusted earnings per diluted share is a non-GAAP measure that excludes the impact of certain items recorded in the first quarter of FY 2013 and reconciled to GAAP, including the sale of a building, a favorable adjustment to restructuring reserves, a charge relating to a dispute and one-time adjustments to deferred tax assets, but does not include any items related to the acquisition of Liquent).
Delays in decision-making by clients are expected to lead to softer new business wins in the second quarter of FY 2013 and a shift of pending requests for proposals into the third quarter of FY 2013.