inVentiv Health to be bought for $1bn by THL

By Gareth Macdonald

- Last updated on GMT

Related tags: Contract, Revenue

US private equity group Thomas H Lee Partners (THL) has confirmed that it will buy inVentiv Health

According to a statement released late last week THL said it had entered into a definitive agreement to acquire the US contract commercial servicer provider for $1.1bn (€845m).

The acquisition, which has bee approved by inVentiv’s board, brings to an end recent speculation​ that the firm was considering takeover offers from LabCorp, Cardinal Health​ and McKesson​.

THL managing director Todd Abbrecht, set out the motivation for the deal, explaining that inVentiv’s “range of products and services offers comprehensive outsourcing solutions for its customers and presents numerous opportunities for [growth].”

Abbrecht’s contention fits with recent comments by Auriga USA analyst Gene Mannheimer, who spoke to the Wall Street Journal​ when news about a possible inVentiv takeover first emerged.

In an interview Mannheimer said the overall of the US healthcare system will increase demand for the type of regulatory expertise and patient compliance services provided by inVentiv.

However, other observers were surprised by the price THL is willing to pay, including Jefferies & Co analyst David Windley, who told Reuters that the per share valuation was higher than expected.

"We thought a deal might go as high as mid-twenties, so the [$26 per share] purchase price is coming at the high end of where I was thinking​."

Q1 results

In related news, inVentiv reported an encouraging set of first quarter results, with operating income climbing 12.4 per cent to $21.7m and revenues increasing 4 per cent to $269.3m.

Blane Walter inVentiv CEO said that: “Our results are indicative of our clients’ willingness to outsource services to trusted external partners who can provide lower cost, higher quality, and more flexible solutions​."

The New Jersey firm said that the gains had been driven by a 5 per cent expansion of its clinical unit, including its patient reported outcomes and trials staffing business.

The firm’s communications division also made progress in the three months to March 31, with revenues increasing 24 per cent to $88m despite what inVentiv said had been a slow start to the quarter.

Commercial services revenue fell 10 per cent in the quarter. inVentiv said that the decline was due to a reduction in sales representative headcount.

However, since then inVentiv said that its commercial service unit has “won three new or expanded sales team contracts in the first quarter, including a new contract with a top 20 pharmaceutical company for an embedded sales team​.”

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