Parexel International to go private after $5 billion deal
The global biopharmaceutical service provider, Parexel, is being snapped up by private equity group Pamplona Capital Management in a deal valued at approximately $5 billion (including debt) marking further consolidation of the contract research sector.
The groups have signed a definitive agreement under which Pamplona will acquire all of the outstanding shares of Paraxel for $88.10 per share in cash.
The purchase price represents a 27.9% premium to Parexel’s unaffected closing stock price on May 5, 2017, and a 23.3% premium to the company’s undisturbed 52-week high, the firm noted.
According to various media reports, “activist investors” in Parexel including Starboard Value had been applying pressure for a sale on the basis of weak profit margins.
Parexel’s chairman and chief executive Josef von Rickenbach said the board “unanimously determined that this all-cash transaction and the significant, certain value it provides” is in the best interest of firm’s shareholders and company.
Further explaining the drive behind the move, he added: “As our results over the past year show, the market for biopharmaceutical services is evolving. We believe the more flexible corporate structure afforded by this transaction will better position us to advance Parexel’s strategy in light of these realities and to shape the company to best capitalise on our exciting market opportunities.”
The deal is expected to close early in the fourth quarter, subject to the approval of a majority of Parexel shareholders and the satisfaction of other customary closing conditions.
Source – PharmaTimes