Drug CRO Medpace to be sold to European PE firm Cinven for $915 mn

European buyout firm Cinven Ltd yesterday confirmed a media report that it will acquire pharmaceutical contract research company Medpace Inc for $915 million from CCMP Capital Advisors.

On Sunday, Reuters had reported that Cinven outbid peers GTCR LLC and Summit Partners and is close to buying Medpace for around $900 million. (See: PE firm Cinven close to buying contract research firm Medpace for $900 mn)

CCMP had acquired an 81-per cent stake in Medpace in 2011 for around $484 million. The remaining stake is held by the management.

New York-based CCMP had in November 2013 hired investment bank Jefferies Group to look for prospective bidders and run an auction for Medpace.

Dr. August Medpace founder and currently its president and CEO, and the Medpace management team will remain significant minority investors alongside Cinven.

Founded in 1992, Medpace is a global CRO company providing contract research services to the R&D departments of pharma, biotech and medical device clients to help plan and oversee their clinical trials.

The Cincinnati, Ohio-based company focuses on small to mid-size companies and has significant expertise in therapeutic areas such as metabolic, cardiovascular, oncology, anti-viral/anti-infective, central nervous system and medical devices.

It has over 1,500 employees with approximately 40 per cent of clinical operations employees in Europe.

Medpace has 30 offices including laboratories throughout Europe, Asia, the Middle East, Australia, Africa, and the Americas, and generated an adjusted EBITDA of $94 million in 2013.

Cinven said that it has recently been focusing on the CRO industry as an attractive market in which to invest. The London-based buyout firm added that increased R&D spending by the pharma and biotech industry, due to the growing number and complexity of clinical trials required to bring new molecules to market, is expected to fuel strong growth for the CRO industry, especially for those that focus on smaller pharma and biotech customer

The current management team at Medpace will continue to be led by Dr. August Troendle.

Supraj Rajagopalan, partner at Cinven, said, ''Cinven's healthcare team identified the CRO industry as an attractive market in which to invest given its fundamental growth characteristics. The CRO industry consolidation has created a gap in the market serving the mid-cap pharma and smaller biotech players – where Medpace operates and where we intend to capitalise on organic growth opportunities.''