Pharma contractor Syneos to be taken private in $7.1B deal
10 May 2023
AcquisitionIPOExecutive Change
Dive Brief:
Syneos Health, a leading biopharmaceutical contract research organization, agreed to be acquired for $7.1 billion by a group of private equity firms.
Elliott Investment Management, Patient Square Capital and Veritas Capital will take on outstanding debt plus pay $43 a share for Syneos, according to terms released Wednesday. The company’s shares closed at $38.45 on Tuesday.
Syneos expects the transaction to close in the second half of this year after approval from regulators and investors. The stock would then stop trading on the Nasdaq.
Dive Insight:
Syneos was created through the merger of InVentiv Health and INC Research in 2017 and quickly vaulted into the top echelon of companies that offer outsourced research services. At the time the merger was announced, the combined company was valued at $7.4 billion.
Since then, Syneos has experienced a series of ups and downs that saw its shares climb above $100 in late 2021 only to fall below $26 a year later. The latest outreach to potential suitors followed a drop in its backlog for research contracts, Reuters reported in February. The company also explored a sale in 2020 but abandoned the effort amid the COVID-19 pandemic, the newswire said.
First-quarter revenue at Syneos grew 1.5% to $1.36 billion. The Morrisville, North Carolina-based company reported a net loss of $72.1 million, or 70 cents a share, for the first three months of the year.
Executives at the three private equity firms said they were drawn to Syneos’ position in an attractive market. Biotechnology companies are increasingly looking to CROs like Syneos to help them navigate clinical development work that’s becoming more complex with advancements in technology.
The market’s growth potential has spurred a wave of mergers and acquisitions in recent years. In 2021, Icon bought PRA Health Sciences for about $12 billion in cash and stock. That followed LabCorp’s $6 billion acquisition of Covance in 2015, the $9 billion merger of IMS Health and Quintiles in 2016 and Thermo Fisher’s more recent purchases of Patheon for $7.2 billion and Brammer Bio for $1.7 billion.
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