INC-inVentiv merger creates world’s second largest CRO


Merger Mania

In order to stay competitive, pharmaceutical developers have accelerated the pace of outsourcing their research studies to contract research organizations (CROs) during the past decade.  CROs have been under pressure to find the resources to handle the rapidly increasing workload.

Just as CROs Quintiles and IMS Health merged into a $19 billion company last year, Raleigh, North Carolina-based INC and Boston-based inVentiv are merging to become the world’s second largest biopharmaceutical outsourcing provider. Earlier this month the two CROs issued a statement saying that they “unanimously approved a definitive merger agreement pursuant to which their businesses would combine in an all-stock transaction, creating a leading global biopharmaceutical solutions organization” worth about $7.4 billion.The merger reportedly improves cash flow, saves $100 million per year in cost synergies and provides more equipment, staff and reach.

INC’s shareholders will own 53 percent of the merged company, while inVentiv shareholders will own 47 percent. Advent International and Thomas H. Lee Partners, two private equity firms that are currently equal equity owners of inVentiv, will continue to be investors in the new company. The business, which will have 22,000 employees, will be headquartered in Raleigh, with a “significant presence in the Northeast corridor of the United States, and operations worldwide” in more than 110 countries.

Alistair Macdonald, CEO of INC will assume the role of chief of the merged company. Michael Bell,  inVentiv’sCEO, will become executive chairman.

INC had been planning to move its headquarters to a new site in Morrisville, North Carolina. It was going to invest $38 million and add 550 jobs over the next five years. The objective was to bring all of its 1,375 employees together in one place by 2018.

According to Macdonald, “Customers are increasingly seeking simultaneous approvals and product launches in multiple markets worldwide. Through this strategic combination, we are bringing together two of the most innovative and respected players in the field to create a leading global biopharma solutions organization with a full suite of clinical and commercial solutions to address the needs of biopharmaceutical companies, patients, physicians and payers. The combination of INC Research and inVentiv will expand our global scale and add capabilities to grow our addressable market.”

As Bell said, “As biopharmaceutical companies of all sizes face increasingly complex challenges to bring products to market, they are seeking comprehensive outsourced solutions across the clinical and commercial spectrum. The new company is purpose-built to address market realities where clinical and commercial must work together, sharing expertise, data and insights, to improve client performance.We believe this merger has significant client advantages as it deepens our scale, scope and therapeutic expertise. This is an exciting opportunity to bring together two best-in-class, industry-leading teams who share the commitment to shorten the distance from lab to life.”

The companies hope that they canjoin forces to earn more money through greater offerings to clients. They expect the merged company to “up its clinical scale and therapeutic depth, all in order to tackle the increasingly complex biopharmaceutical development and commercialization environment.”

Listen to our full podcast episode on this merger here.  


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