Cinven coughs up $915m to buy stake in drug testers Medpace
PRIVATE equity firm Cinven yesterday announced a $915m (£549m) deal to take control of drug testing business Medpace, the latest in a string of deals for its London-based healthcare team.
Medpace, which is based in Ohio but has a strong presence in the UK and Germany, offers testing and trials for pharmaceutical firms developing new drugs and was sold by private equity business CCMP Capital.
It currently focuses on drugs related to health issues like diabetes but the takeover is set to allow it to push further into areas like oncology. “This business is growing very fast and we would like to help grow the firm’s international capability in places like Asia,” Cinven principal Alex Leslie told City A.M.
The enterprise value of the deal, which is backed by equity and a senior debt structure, represents a earnings multiple of about 9.5 times. This is a small discount to other deals in the sector.
The acquisition is the latest foray by Cinven’s healthcare team, which last inked a deal in June 2013 with its buy of CeramTec in June 2013. Medpace is Cinven’s eleventh healthcare deal since its founding.
Cinven’s well respected healthcare team drew up a blueprint last year to help guide future investments, which identified contract research organisations (CRO) like Medpace as an area of interest.
“The CRO industry consolidation has created a gap in the market serving the mid-cap pharma and smaller biotech players – where Medpace operates and where we intend to capitalise on organic growth opportunities,” Cinven partner Supraj Rajagopalan said in a statement yesterday.
The deal is the most recent investment from Cinven’s fifth buyout fund, which raised €5.3bn in July last year.