INC's financiers bank another $272M in the IPO afterglow

INC Research CEO Jamie Macdonald

A year after INC Research's ($INCR) $150 million IPO, the company's longtime financial supporters are flipping more shares in exchange for $272 million, taking a page from the private equity giants that have profited from the trend of CROs going public.

Affiliates of Avista Capital Partners and the Ontario Teachers' Pension Plan have priced 6 million of their INC shares at $45.35 each, reducing their ownership of the company and pocketing cash in exchange. INC won't see any of the proceeds from the secondary offering, but the CRO has signed a separate deal to buy back 3 million of its own shares from the same stockholders.

The recent spate of CRO IPOs began in 2013 when Quintiles ($Q) went public for about $950 million, a transaction followed by a long line of secondary offerings that minted cash for its private equity owners. As the trend took hold, the financiers behind PRA Health Sciences ($PRAH), Catalent ($CTLT) and INC took each company public, following up with similar stock sales.

And those secondary offerings tend to get more lucrative each time. INC's share price has jumped nearly 250% since its 2014 IPO as the company has come through with quarter after quarter of revenue growth.

In October, INC increased its full-year revenue guidance by about 1% at midpoint, expecting between $910 million and $914 million in 2015. The company also upped its earnings per share guidance by about 24%, projecting profits between $1.84 and $1.93.

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