Theorem Hunts for Acquisitions after Snagging Credit Line with GE Capital

By Zachary Brennan contact

- Last updated on GMT

Related tags: Company, Private equity

Theorem Hunts for M&A after Snagging Credit Line with GE Capital
Theorem Hunts for M&A after Snagging Credit Line with GE Capital
Mid-sized CRO Theorem Clinical Research is looking for companies to acquire, perhaps in China, after obtaining a new credit line with GE Capital. 

Jason Monteleone, Theorem SVP and CFO, told that the company is looking to primarily “strengthen its current capabilities​” in pharma and device trials, as well as its analytic expertise, and to expand geographically, particularly in Asia.

We want to expand on our skill sets…anything from a decent-sized acquisition to a mid-sized CRO​,” Monteleone said. He added that the company is not limited by the line of credit from GE because Nautic Partners, the private equity firm that owns the company, will provide a cash infusion if it’s necessary.

The company currently has offices in more than 30 countries, with about 40% of its staff in Asia, 20% in Europe and 40% in North America. An uptick in trial demand in Asia by its current clients could be what spurs an acquisition there for Theorem.

We would look at opportunities to expand even more in China to build our footprint there​,” Monteleone said.

Strength as a Mid-Sized CRO

Despite what some might say about the largest CROs dominating their competition​ through strategic partnerships with the largest pharma companies, Monteleone said Theorem’s backlog “is at its highest point since 2009​,” and the company expects it to continue to increase and generate more revenue through 2014.

The company’s pharma and medical device trial skill sets have given it an advantage over some of the larger CROs that don’t focus on devices, Monteleone said. He added that Theorem is filling a niche between the larger CROs that can’t conduct device trials and the smaller, more regional CROs that can’t work on a global scale.

Some in the industry have recently suggested that mid-sized CROs are due for consolidation​.

The large pharmaceutical companies are still talking to mid-size CROs​,” Monteleone said, noting that one of the CEOs of such a large pharma company recently compared the CRO situation to a bride getting her wedding dress from a specialized boutique shop and going to the larger department stores for the other parts of her wedding.

What we do hear a bit with our biotech and small pharma clients is that they feel more comfortable going with us because they’re not competing with big pharma​,” Monteleone said, noting clients like the access they get to Theorem’s senior executives.

Mid-sized CROs are finding their niche and there’s a need for them​,” he added.

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