Parexel buys Heron for $24M, brightens 2013 outlook

Parexel CEO Josef von Rickenbach

Parexel International ($PRXL) is adding to its business and ticking up its forecast, buying consulting outfit Heron for $24 million and reporting another strong sales quarter.

Heron is a U.K.-based life sciences consultancy that provides commercialization guidance to clients, and the buyout terms include a possible extra $14.2 million if Heron reaches certain 26-month financial targets.

Meanwhile, Parexel hauled in $454.5 million in revenue last quarter, a 27.7% increase over the same period last year, and the company is increasing its expected annual sales, counting on swelling demand for research services.

Net income came in at $29.5 million on the quarter, a 28.8% increase the company credits to growth in all three of its business units. Clinical research services grew 30% to $342.4 million, while consulting swelled 16.8% to $50.6 million and Perceptive Informatics, the CRO's IT unit, jumped 24.7% to $61.5 million.

Parexel now expects about $1.8 billion in full-year revenue, around 2.2% higher than the guidance it issued in January. The sunnier outlook is due in part to the contributions of Heron and Liquent, the regulatory software company Parexel bought for $72 million in December. Liquent has already contributed about $9.3 million to revenue, and CEO Josef von Rickenbach said he expects Heron to bolster Parexel's consulting and medical communications business.

"We believe the overall market for our services remains healthy, and our differentiated product and service offerings continue to be well-received by clients," von Rickenbach said in a statement. "The investments that we have made over the years are paying off, and I believe that we have the talent, resources and infrastructure in place to continue to succeed in the evolving CRO marketplace."

- read the deal announcement
- check out Parexel's earnings release
- here are the full results (PDF)

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