Quintiles is planning to dish out a $25 million payment to its founder and controlling shareholders once it goes public, a termination fee designed to make up for the service fees that won't be paid post-IPO.
Each year, Quintiles pays out a $5 million management service fee to founder Dennis Gillings and a host of controlling investors, a practice that will be discontinued once the company's planned $600 million IPO goes through. Quintiles expects to strike an agreement with Gillings and company, handing over a one-time $25 million in the process. The company didn't disclose how it would divvy up the money among the shareholders.
Quintiles disclosed its plans in an amended filing with the SEC, but the CRO giant still hasn't specified how many shares it plans to offer and at what price, working off of a $600 million placeholder value used to calculate its listing fee. The company's S-1 is mostly a series of blank spaces where dollar values belong, but Quintiles has said it will use much of the money raised to pay down debt.
The CRO has stayed mostly quiet since announcing its go-public plans in February while analysts speculate on its value and pricing plans. Moody's estimates Quintiles is worth about $4 billion, and Reuters' figured its equity value last year at around $2.77 billion. In 2008, a team of private equity firms bought the company for a reported $3.8 billion.
Since then, though, Quintiles has soared to the top of the CRO world through expansion and acquisition, partnering with all of the top-20 drugmakers and employing 25,000 people across 60 countries. Last year, the company brought in about $3.7 billion in revenue and $177.5 million in net income, according to its filing.
- read the updated S-1