Cinven to invest in Medpace
Strong growth drivers in CRO market
24 February 2014
European private equity firm, Cinven, today announces a majority investment in Medpace, Inc. ('Medpace' or 'the Group'), a leading contract research organisation ('CRO'), for a total consideration of US$915 million plus certain cash inflows relating to the period of ownership, acquired from CCMP Capital Advisors, LLC.
Medpace is a global CRO business providing management services to the R&D departments of pharma, biotech and medical device clients to help plan and oversee their clinical trials. The Group 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.
Cinven's healthcare team has been focused for some time on the CRO industry as an attractive market in which to invest. Increased R&D spend 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 operators (like Medpace) that focus on smaller pharma and biotech customers, where the outlook for R&D spend is most positive.
In addition, Medpace has been rapidly expanding its presence in Europe and has the opportunity to achieve greater penetration across Europe and Asia, where Cinven has a strong track record of portfolio company growth.
Established in 1992, Medpace is headquartered in Cincinnati, Ohio and has global operations in over 45 countries. It has over 1,500 employees with approximately 40% of clinical operations employees in Europe. In 2013, Medpace generated an adjusted EBITDA of US$94m.
The management team will continue to be led by Dr. August Troendle, the founder of Medpace and current President and CEO. He formerly worked at Sandoz (Novartis) within clinical development and for the US Food and Drug Administration. Dr Troendle and the Medpace management team will remain significant minority investors alongside Cinven.
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."
Alex Leslie, Principal at Cinven, added:
"Medpace has a highly experienced management team and a strong market positioning, with growth in Europe and Asia presenting a real opportunity for the business. The Cinven team is well placed to accelerate this growth given our considerable European presence and also the strength of our Asia portfolio team – which has been instrumental in the success of international businesses in the region."
Dr August Troendle, CEO, added:
"We are very excited about the opportunity of working with Cinven. Medpace has generated significant growth recently in Europe, so it made huge sense for us to partner with a private equity sponsor with a strong European presence and the ability to help us expand our operations in Asia.
"Medpace is committed to advancing the most streamlined and cost-effective path to drug approval and ultimately helping our sponsors improve people's lives. We are confident that Cinven's investment will enable us to continue leveraging our team's significant expertise in delivering insight, and efficiencies to every phase of a trial."
Cinven was advised by Barclays and Wells Fargo Securities, LLC. Medpace was advised by Jefferies LLC and Fairmont Partners. Completion is subject to customary regulatory approvals.