February 24, 2014 – European private equity firm, Cinven, today announced a majority investment in Medpace, Inc., a leading contract research organization (‘CRO’), for a total consideration of US $915 million plus certain cash inflows relating to the period of ownership, acquired from CCMP Capital Advisors, LLC.
Medpace is a global CRO business providing management services to the R&D departments of pharma, biotech and medical device clients to help plan and oversee their clinical trials. The Group focuses on small to mid-size companies and has significant expertise in therapeutic areas such as metabolic, cardiovascular, oncology, anti-viral/anti-infective, central nervous system and medical devices.
Cinven’s healthcare team has been focused for some time on the CRO industry as an attractive market in which to invest. Increased R&D spend by the pharma and biotech industry, due to the growing number and complexity of clinical trials required to bring new molecules to market, is expected to fuel strong growth for the CRO industry, especially for those operators (like Medpace) that focus on smaller pharma and biotech customers, where the outlook for R&D spend is most positive.
In addition, Medpace has been rapidly expanding its presence in Europe and has the opportunity to achieve greater penetration across Europe and Asia, where Cinven has a strong track record of portfolio company growth.
Established in 1992, Medpace is headquartered in Cincinnati, Ohio and has global operations in over 45 countries. It has over 1,500 employees with approximately 40% of clinical operations employees in Europe. In 2013, Medpace generated an adjusted EBITDA of US$94m.
The management team will continue to be led by Dr. August Troendle, the founder of Medpace and current President and CEO. He formerly worked at Sandoz (Novartis) within clinical development and for the US Food and Drug Administration. Dr Troendle and the Medpace management team will remain significant minority investors alongside Cinven.
Supraj Rajagopalan, Partner at Cinven, said: “Cinven’s healthcare team identified the CRO industry as an attractive market in which to invest given its fundamental growth characteristics. The CRO industry consolidation has created a gap in the market serving the mid-cap pharma and smaller biotech players – where Medpace operates and where we intend to capitalize on organic growth opportunities.”
Alex Leslie, Principal at Cinven, added: “Medpace has a highly experienced management team and a strong market positioning, with growth in Europe and Asia presenting a real opportunity for the business. The Cinven team is well placed to accelerate this growth given our considerable European presence and also the strength of our Asia portfolio team –which has been instrumental in the success of international businesses in the region.”
Dr August Troendle, CEO, added: “We are very excited about the opportunity of working with Cinven. Medpace has generated significant growth recently in Europe, so it made huge sense for us to partner with a private equity sponsor with a strong European presence and the ability to help us expand our operations in Asia.
“Medpace is committed to advancing the most streamlined and cost-effective path to drug approval and ultimately helping our sponsors improve people’s lives. We are confident that Cinven’s investment will enable us to continue leveraging our team’s significant expertise in delivering insight, and efficiencies to every phase of a trial.”
Cinven was advised by Barclays and Wells Fargo Securities, LLC. Medpace was advised by Jefferies LLC and Fairmount Partners. Completion is subject to customary regulatory approvals.
Fairmount Partners previously represented Medpace in the sale of control to CCMP in 2011, and assisted them in acquiring of European medical device CRO MediTech in 2012. Neal McCarthy, Managing Director of Fairmount Partners, said “Medpace is one of the best CROs in the world, and it has been our pleasure to work closely with Dr. August Troendle and his team for over 12 years, and we look forward to continuing our long and deep relationship.”
Cinven is a leading European private equity firm focused on building world-class businesses.
Its funds invest in six key sectors: Business Services, Financial Services, Healthcare, Industrials, Consumer, and Technology, Media and Telecommunications (TMT).
Cinven funds acquire businesses that have European headquarters or substantial European operations and which require an equity investment of €100 million or more.
Its European focus and expertise are complemented by an ability to capitalize on global growth opportunities through its Asian office.
Cinven’s healthcare investments include:
- CeramTec, a global manufacturer of high performance ceramics used in both medical and industrial markets (June 2013)
- AMCo, an international niche pharmaceutical business (Aug/Oct 2012)
- Sebia, an in-vitro diagnostics / protein testing business (June 2010)
- Spire, a UK hospital operator (Aug 2007)
- Phadia, an in-vitro diagnostics/ allergy testing business (Jan 2007)
To date, Cinven has invested in 11 companies in the healthcare sector representing €2.9 billion of invested capital and has generated returns of 2.7x on exited transactions.
Cinven has offices in Guernsey, London, Paris, Frankfurt, Milan, Luxembourg and Hong Kong. Cinven Limited and Cinven Capital Management (V) General Partner Limited are authorized and regulated by the GFSC.
Cinven acquires successful high quality companies and, using proven value creation strategies, works closely with these companies to help them grow. Cinven takes a responsible approach towards its portfolio companies, their employees, suppliers, local communities, the environment and society.
For more information, please visit www.cinven.com
About Fairmount Partners
Based in Philadelphia, Fairmount Partners is the leading investment bank worldwide for pharmaceutical, device and related services businesses. Fairmount provides merger and acquisitions advisory services, and assists companies to raise funding for acquisitions, growth and liquidity. Fairmount’s Pharmaceutical Services Group has assisted clients to complete over 115 transactions in 18 countries in North and South America, Europe, Asia and Australia.
Principals of Fairmount Partners acted as advisors to Medpace in this transaction.