The global contract research organization (CRO) recently closed an investment transaction for an undisclosed amount with the Los Angeles, CA-based private equity (PE) firm Riordan, Lewis & Haden.
The initial investment will fund an expansion of Biorasi’s operational capabilities. “A big part of that will be increasing our headcount, and expanding our headquarters in Miami to accommodate all of the new talent,” Biorasi Chairman Boris Reznik, PhD, told us.
“In the last year alone, we have significantly increased the number of employees in Miami, and we’ll be adding even more next year as we build up capabilities to run larger and more complex trials,” he added. Additionally, the CRO in January opened a regional headquarters in Japan to expand its operation in Asia.
Moving forward, Biorasi also is planning to open another US office and will be investing in people and resources to continue building out its TALOS clinical trial project management platform, “scaling it up to accommodate the trials of the future,” Reznik said.
The company is not ruling out “some small strategic acquisitions” to expand its geographic coverage and functional capabilities – though Reznik stressed it will not be “buying size” as many CROs have.
“We have come to this point by growing organically, and short of those small strategic acquisitions, we plan to continue to grow organically,” he added. Reznik said one of the company’s advantages it the integration of its teams.
“We have seen too many CROs made from a roll-up of acquisitions, and they all face major structural, cultural, and operational problems,” he added.
Navigating the next stages
As per the process to find and decide to partner with RLH, Reznik said the company was planning to take an investment in 2019, “but unexpectedly received some interest from a larger CRO earlier this year.”
“We were not looking for a buyout from another CRO, so the stakes were low, but it gave us a chance to experience the scrutiny of a large investor performing due diligence,” he told us.
The experience kicked off the company’s decision to search for an investor – and it found interest to be high, said Reznik. Biorasi subsequently spoke to a number of firms, aiming to get a good culture fit, he explained, and while coming in at the end of the process, RLH won the company over immediately.
“We were in a position where our business was entirely sustainable, so we didn’t need an outside investment to continue to thrive. Instead, we wanted to find a partner that could help us navigate the next stage of our company in the best way possible,” said Reznik, calling the financial support “the least important part of the deal.”
Per the operational and business challenges involved, the company’s next stage will be “vastly different” to what it has done to date, he added, noting that the input from RLH will be “invaluable” as part of this growth evolution.