Life Sciences Insight

Parexel snapped up, again, as Goldman Sachs, EQT spend $8.5B on the CRO

The rumors were true: Whispers grew this year that Parexel, owned for the past four years by Pamplona Capital, was seeking a sale or an IPO. Today, the whispers stopped as the CRO loudly declared it is being bought out for $8.5 billion.

The suitors and soon-to-be owners are the Swedish investment firm EQT Private Equity and the U.S. giant Goldman Sachs Asset Management, giving Pamplona a healthy return on the $5 billion it spent on the CRO in 2017.

Then, it had been a publicly traded company, but the firm took it private; this latest deal appears to see that maintained, at least for now.

This comes amid a tough time for CROs, where the COVID crisis hit the sector hard last year, seeing revenue down and trial sites hit by lockdowns and safety worries.

The sector as a whole has bounced back since the dark days of spring/summer 2020, with most tapping a hybrid siteless/bricks and mortar approach to keep subjects in testing, and allow the flow of biopharma R&D to run free.

However, the whole saga has likely made CROs a little cheaper after the took financial hits last year; CROs have remained in high demand for years, and there has been major movement this year alone: following the playbook of LabCorp and Covance a few years back, Thermo Fisher in 2021 snapped up PPD in a major $17.4 billion deal, while Icon spent $12 billion to subsume PRA Health into its biz.

All of this came after a series of mega mergers in the 2015-16 period, which saw Quintiles and IMS Health become IQVIA.

“Over the past 18 months Parexel has continued its strong growth trajectory delivering on its patients-first focus and accelerating new therapies to patients in need around the world,” said Parexel CEO Jamie Macdonald.

“With the market for outsourced clinical research services anticipated to grow at a conservative CAGR of 8 to 9% our focus remains on advancing and innovating Parexel to meet our customers’ needs across the evolving clinical development landscape. EQT and Goldman Sachs support this vision and are committed to investing in Parexel and our people to capitalize on this exciting market opportunity and make a difference for patients.”

“We have followed Parexel closely during the past few years and have been impressed by the company’s development and trajectory,” added Eric Liu, partner and global co-head of healthcare at EQT.

“Our investment in Parexel reflects EQT’s thematic focus on the life sciences industry, as well as our commitment to partner with businesses that have a positive impact on society. We are excited to partner with Goldman Sachs for the next stage of Parexel’s journey, and to back Jamie, who prior to his role at Parexel had been a long-time senior advisor to EQT, as well as the rest of the Parexel team.”

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