Genstar flips eClinical player ERT to Nordic Capital for 8-times return

Nordic Capital has bought clinical trial data-collection service provider ERT from private equity firm Genstar Capital. ERT, which went on an acquisition spree after being bought by Genstar in 2012, is presenting the change of ownership as an opportunity to further invest in its business.

The deal brings Genstar's four-year ownership of ERT to an end. In that period, ERT has gobbled up other clinical trial software providers to strengthen its presence in electronic clinical outcomes assessment (eCOA) and build out its support software. The ink was barely dry on Genstar's takeover of ERT when a deal to acquire electronic diary technology provider invivodata was unveiled. ERT followed up that deal by adding cloud-based clinical trial management software to its toolkit through a takeover of eClinical Insights, before completing its activity by acquiring PHT.

Genstar thinks the takeovers have helped ERT to branch out beyond its traditional areas of focus. "ERT was originally solely in respiratory and cardiac testing for clinical trials," Genstar Managing Director Jean-Pierre Conte told LBO Wire. "We, through acquisitions, got it into the electronic clinical outcomes assessment market, which has been accelerating because people are using software and electronics more and more to monitor patients."

ERT CEO Jim Corrigan is keen for the growth initiated under Genstar to continue now Nordic Capital is overseeing the operation, noting plans to make "investments across our portfolio of capabilities" in a statement.

While the nature and success of these investments is uncertain, Genstar is in a position to tally up the value of its dealings. None of the parties have disclosed how much Nordic Capital is paying for ERT, but comments made by an anonymous source to LBO Wire suggests a hefty fee was involved. Genstar paid $400 million to take ERT private and, according to the source, has made an eight-fold return on its investment.

"It is a home run for Genstar, with dramatic and significant return generated," Conte said. Genstar has a track record of flipping clinical trial businesses for profits. In 2013, it sold on CRO PRA International for a profit of $500 million.

- read Genstar's release
- here's Nordic Capital's statement
- check out LBO Wire's coverage