The pharma industry, and biotech in particular, had a spectacular runup in equity valuations over the past year or so, although more recently some of that interest has moderated. So it’s not surprising that Advent International, a New York private investment company with over $42 billion in assets under management, is choosing to invest more selectively, by joining Thomas H. Lee Partners (THL), existing owner (with some other investors) of inVentiv Health. The announcement on Aug. 1 indicates that Advent will be an equal-equity owner of inVentiv, and values the company at $3.8 billion, with most-recent fiscal-year revenue at $2.2 billion. inVentiv, which went private in 2010, had been readying an IPO earlier this year. Presumably, the Advent investment was a more attractive option than the public-investment route.
“We’re pleased to have two preeminent private equity firms – THL and Advent – backing our unique biopharma outsourcing model,” said Michael Bell, chairman and CEO of inVentiv Health. “It’s a $250-billion market with tremendous potential. With THL’s strategic support we have realized significant growth over the last several years. We’re looking forward to adding Advent’s investment, operational and healthcare sector expertise. This will allow us to realize our full potential so we can better serve the biopharmaceutical industry in navigating an increasingly complex scientific and regulatory environment.”
inVentiv has an unusually broad portfolio of services for life sciences, ranging from outsourced clinical drug and device research to contract sales and healthcare advertising and communications. The company has been actively pruning and investing in its service-related businesses; most recently, it divested its Patient Access Solutions group to Xerox; in 2014 it did a refinancing of debt and received an additional $50 million from THL.
The Advent investment in outsourced services follows other big-ticket recent transactions: the pending merger between Quintiles and IMS Health; and LabCorp’s 2014 purchase of Covance. All of these businesses blend services in the clinical arena with those in outsourcing of commercial activity, consulting and data services. The end result seems to be: it’s a good bet that life sciences companies will continue to expand their reliance on outsourced services.