INC in the big leagues after Kendle takeover

12-Jul-2011 - Last updated on 13-Jul-2011 at 09:17 GMT

INC Research has completed the acquisition of Kendle in its battle to become one of the top five contract research organisations (CRO).

In May Kendle’s board of directors unanimously approved the deal, and now after a majority vote from shareholders the clinical CRO has closed its doors for good to become part of the INC empire.

Yesterday the companies inked the deal resulting in an all-cash transaction with a total equity value of approximately $232m (€165m) or $15.25 per share.

The combined company will operate as INC Research, LLC and will be led by James Ogle, chief executive officer.

The move is the latest step in INC’s aggressive growth strategy after it was taken over by private equity holders Avista Capital Partners and Ontario Teachers’ Pension Plan last year.

Now with its new addition – and its purchase of late stage assets from MDS Pharma Services in 2009 - INC employs approximately 5,000 employees across six continents with experience spanning more than 100 countries.

But it is Kendle’s stronghold in Asia that strengthens INC’s foothold at the top of the tree, and that could make the biggest difference to the future success of patient recruitment.

Ogle said: “This transaction has enhanced our value proposition to global drug developers and given us a broader range of local operations with global oversight, allowing us to maintain high standards and quality results.”

The end of an era

For Kendle, the new merger is a result of years of struggle as a small fish in a big CRO pond.

In the first half of the decade large quantities of Kendle’s big pharma client base merged, and the resulting hiatus in outsourcing was reflected in their finances.

And though they seemed to regain some ground around 2006-2008 by focusing on small and mid-tier biopharmaceutical players, the business still found itself too big to be fulfilled by “niche offerings”.

Financial analyst Eric Coldwell said: “Kendle has oft struggled as a public company, being too big to focus on niche offerings, not large enough to fully participate in global strategic alliances, and relatively undifferentiated in the market.”

In a statement left on their now defunct website, Kendle look to the future in hope as a cog in the machinery of big business.

The statement read: “Expect big things from this exciting new global force in clinical development.”