Quintiles resurrects refinancing plan

By Gareth Macdonald

- Last updated on GMT

Related tags Debt

US contract research organisation (CRO) Quintiles has resurrected plans to refinance in a bid to clear debts in a more healthy credit market.

The CRO wants to establish a $2.2bn (€1.5bn) credit facility consisting of a $225m first lien revolving credit facility due in 2016 and a $2bn loan that is due in 2018.

The news reactivates the plan that Quintiles unveiled in March​, which was halted weeks later after conditions in the credit market turned and made the move ‘less advantageous.'

Today Quintiles said the decision to resume refinancing efforts was motivated by “a debt market currently offering attractive terms to companies with strong financial track records.”

Spokesman Phil Bridges told Outsourcing-pharma.com that: "The proceeds of the refinancing will be employed for a variety of uses. As a private company, Quintiles prefers to keep certain operational and financial details confidential. We do not plan to make specifics of this deal public."

Quintiles view of the recovery of the financial markets and interest in the contract research sector is supported by the trend that has seen a growing number of private equity firms invest in CROs in the last few​ years. The most recent​ of these deals, Nautic Partners acquisition of Omnicare, took place just last week.

Market dynamics

However, while few would argue that Quintiles, which is widely acknowledged as the sector’s largest player, is anything other than a safe bet for investors, the timing of its decision may be due to more than just market recovery.

In the last week, for example, we have seen INC Research buy​ Kendle citing a desire for top-five CRO sector status as a motivation and PPD expand​ its consulting wing after post Q1 gains.

These developments, coupled with the recent​ forecast that the top seven CROs will dominate over half of the world’s contract research market by 2015, mean the contract research sector is becoming an increasingly competitive field.

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