INC Research Inc., the contract research organization in Raleigh, North Carolina, is passing from one group of investors to another in a deal reported to be worth $600 million.
Avista Capital Partners and Ontario Teachers’ Pension Plan have agreed to buy the North Carolina company from an investor group led by Crosspoint Venture Partners and Adams Street Partners. An anonymous source who had “direct knowledge of the matter” told Bloomberg BusinessWeek the deal was worth $600 million.
Though INC Research serves drug and biotechnology companies from Phase I through Phase IV clinical programs, the company specializes in late-stage programs for therapies.
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Founded in 1999, INC Research employs 2,000 people in 40 countries. The company initially focused on disorders of the central nervous system and has expanded to studies in heart disease, oncology, women’s health, vaccines and other areas, spokeswoman Trisha Vonder Reith told Bloomberg BusinessWeek, which broke the deal story.
“This is an exciting time for INC Research, and we are thrilled to be partnering with Avista Capital Partners and Teachers’ Private Capital as we embark on the next phase of the Company’s development,” said James Ogle, INC Research’s chief executive, in a joint statement with his company’s investors.
“Avista Capital Partners and Teachers’ Private Capital are well-regarded investors in healthcare, and we look forward to benefitting from their extensive industry knowledge and experience,” Ogle said. “We feel confident that these investment partners will enhance the longstanding support our company has offered to help customers bring drugs to market and improve world health.”
David Burgstahler, partner and president at Avista, said his New York-based private equity firm and Teachers’ Private Capital — the private investor department of the Canadian pension fund — would work with the INC Research management team to support the company’s accelerated growth.
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“INC Research has an excellent reputation amongst its premier customer base for quality service and therapeutic expertise, and is well positioned to continue to expand its global footprint and capabilities as a leading contract research organization,” Burgstahler said in his company’s statement.
The acquisition, which is subject to closing conditions and regulatory approvals, is expected to close in the fourth quarter.
INC Research was the second contract research organization acquisition announced last week, according to Bloomberg BusinessWeek. Medco Health Solutions Inc., the largest U.S. pharmacy benefits manager by revenue, said Aug. 16 it would buy United BioSource Corp. in Bethesda, Maryland, for $730 million, Bloomberg said.
The contract research organization industry has been struggling with cutbacks in research and development spending among client biopharmaceutical companies.