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Quintiles Seeks to Raise as Much as $790M in IPO Next Month

By Zachary Brennan+

30-Apr-2013
Last updated on 30-Apr-2013 at 13:04 GMT

Quintiles Seeks to Raise as Much as $790M in IPO Next Month

CRO Quintiles and its shareholders are offering more than 19 million shares of common stock that will be priced between $36 and $40 per share, according to an updated S-1 filing with the US SEC .

The latest filing -- expecting about $790m -- adds about $200m to what the company previously estimated it would bring in from the IPO . Of the 19m shares of common stock, the company is offering about 14m shares, and 5.9m shares, or 8.9m, if the underwriters of the IPO exercise in full their option to purchase additional shares. The underwriters include Barclays, Morgan Stanley and J.P. Morgan among others.

We estimate that the net proceeds to us from this offering will be approximately $489.8 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us,” the company said, under the assumption that the $38 per share price would be met.

Quintiles plans to use about $306m to pay a loan obtained in February 2012, about $50m to repay indebtedness under its senior secured credit facilities, $25m to pay a one-time fee to Dennis Gillings, the company’s founder and chairman, and other sponsors, as well as any “remaining amounts for general corporate purposes.”

The IPO, if it goes according to plan, would give Quintiles an enterprise value of about $6.3 billion, or about 13 times earnings before interest, taxes, depreciation and amortization in the previous year, according to filings and data compiled by Bloomberg .

Quintiles’s IPO is scheduled for May 9, and the company plans to list on the New York  Stock Exchange under the symbol Q.

The S-1 filing also continues to remain upbeat about the CRO industry in general, noting that R&D spending is expected to increase by about $4b by 2015.

We estimate that clinical development spending outsourced to CROs in Phases I-IV in 2011 was approximately $16 billion and will grow to approximately $22 billion by 2015. We expect outsourced clinical development to CROs to grow 5%-8% annually during this period. Of this annual growth, webelieve that up to 2% will be derived from increased R&D expenditures, with the remainder coming from increased outsourcing penetration,” the North Carolina-based company said.

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