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Parexel $8.5bn takeover prompted by large pharma customers

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Parexel’s soon-to-be owners EQT Private Equity and Goldman Sachs Asset Management cited growth and large pharma and biotech customer base as drivers for the takeover.

EQT Private Equity and Goldman Sachs announced it would pay former owner Pamplona Capital Management $8.5 billion for Parexel in early July.

Eric Liu, global co-head of Healthcare at EQT, cited Parexel’s “development and trajectory” over the past few years as the driver for the investment.

Similarly Jo Natauri, Goldman’s head of private healthcare investing, said the CRO’s “distinguished track record of delivering clinical excellence to their large pharma and biotech customers” was key.

Neither investor wished to comment when contacted by Clinical Insider.

Rumours about a potential Parexel acquisition have been circulating for a while with AmerisourceBergen and a group led by private equity organization Cinven suggested as potential suitors.

EQT’s current healthcare portfolio includes delivery tech firm Fertin Pharma, chemicals and drug manufacturer Kara Pharma and Sweden-based contract manufacturing organization Recipharm, which it acquired in February.

The news comes a few weeks after EQT sold its majority interest in Aldevron – a plasmid DNA supplier to the cell and gene therapy sector and one of the contractors involved in Moderna’s COVID-19 vaccine – to bioprocess firm Danaher Corporation.

Recovery?

The deal is the latest indication investor M&A activity in the CRO sector has returned.

In the early days of the pandemic, many contract research firms struggled as customer put trials on hold and lockdowns forced the closure of clinical sites. As a result there were fewer takeovers.

A survey by JP Morgan last April suggested 80% of pharmaceutical companies questioned were experiencing pandemic-relation disruption in their trial programs.

This year things have changed and investors have returned. Prior to the Parexel deal, Thermo Fisher Scientific agreed to stump-up $17.4 billion for PPD. And before that – in February – Icon bought PRA Health Sciences for $12 billion.

Image: iStock/cagkansayin

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