3 to 7 year itch
It is unlikely any other private contractors will go public before the end of the year – if anything was planned prospectuses for the firms involved would already be doing the rounds.
That said there are a few potential IPO candidates worth keeping an eye on, particularly in the CRO sector where private equity ownership usually lasts a few years.
For example, One Equity Partners, the PE that took Quintiles private in 2003, sold its stake in the CRO to Bain Capital and TPG Capital after five years. Quintiles another five years later went public last year when Bain, TPG and fellow backers, 3i Group and Temasek Holdings, sold off some of their shares.
PRA, which went private in 2007 when it was bought by Genstar, re-joined the public markets seven years after leaving them and, as stated above, INC was public for about four years. So PE exit strategies seem to kick in sometime between three and five years after the original investment.
This idea fits with the view of Fairmount Partners managing director Neil McCarthy, who told us in September that: “PE investors have a typical window of 3-7 years. If things are going well they can sell any time in the window. If things are not going well, they typically hold on longer.”
Applying this logic to other large CROs throws up inVentiv, owned by Thomas H Lee Partners since 2010, and PPD, which was acquired by the Carlyle Group and Hellman & Friedman in October of the following year, as potential IPO candidates in 2015.
