Medpace seeks $151M IPO; says CRO industry worth $31B by decade’s end

Medpace Holdings is looking to go public and raise $150.5 million as it joins the recent spate of deals and raises across the CRO industry.

The Cincinnati, OH-based CRO, which works on drug and medical device development, said it will offer 7 million shares at a price range of $20 to $23.

According to its SEC-1 form, the company’s CEO and founder August Troendle is set to buy up $20 million worth of shares in the offering (around 13%). At the midpoint of the proposed range, Medpace would command a fully diluted market value of $863 million.

Medpace, which was founded in 1992, booked $348 million in sales for the 12 months ended June 30. It plans to list on the Nasdaq under the symbol "MEDP."

The company is currently owned by European private equity firm Cinven, which bought the CRO from fellow equity firm CCMP Capital Advisors back in 2014 for around $900 million. Reuters reported back in April that the CRO had filed a secretive IPO that valued the company at $1 billion.

This comes in the same week that CRO inVentiv announced it was dropping its IPO bid, first filed in April, after receiving a major investment from buyout firm Advent--which now sees it own half of the CRO alongside Thomas H. Lee Partners.

The CRO sector has been booming this year with a glut of deals, M&A and strong growth becoming the norm. In its SEC-1 form Medpace estimates, based on “industry sources,” that global biopharmas spent around $100 billion in 2014 on clinical development--with $23 billion of that being outsourced through companies such as itself.  

“In addition, based on these industry sources, we estimate the CRO market will experience a CAGR of approximately 6% from 2014 through 2019, growing to approximately $31 billion in 2019, as a result of increasing biopharmaceutical clinical development expenditures combined with increased outsourcing penetration,” it added in its filing.

The CRO said that from 2012 through 2015, it grew its own business from around 1,000 employees to over 2,000, while also seeing its net service revenue swell from $177.4 million to $320.1 million, representing a CAGR of 21.7%.

Looking ahead, the company said it would “pursue selective and complementary bolt-on acquisitions.” The company explained in its filing that “We intend to augment our organic growth with targeted acquisitions to expand our current capabilities and service offerings that are complementary to our full-service model. Our acquisition strategy is driven by our comprehensive commitment to serve customer needs.

“While we are continuously assessing the market for attractive opportunities, we do so selectively with a focus on targeting opportunities to acquire and integrate complementary and strategic, non-transformative acquisitions within the CRO sector in order to strengthen our competitive position and provide enhanced value to our customers.”

- check out Medpace’s SEC-1 form

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inVentiv cancels IPO as it announces major investment from Advent