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PharmaNet Development Group agrees to be acquired by JLL Partners

New Jersey-based PharmaNet Development Group, a provider of clinical development services, has agreed to be acquired by private equity firm JLL Partners.

New Jersey-based PharmaNet Development Group, a provider of clinical development services, has agreed to be acquired by private equity firm JLL Partners.

JLL will launch a tender offer to purchase all of the outstanding shares of PharmaNet at a price of USD5 per share in cash, representing a significant premium to PharmaNet’s average closing price for the past 30 days.

The transaction values the company’s common stock at approximately USD100m. The transaction will be financed by a USD250m equity commitment from JLL which includes the necessary funds to retire the USD144m principal amount of the company’s outstanding convertible notes.

The transaction is subject to the valid tender of a majority of PharmaNet common stock, regulatory approvals and other customary conditions, but it is not subject to any financing conditions. The parties expect the tender offer to close by the end of the first quarter of 2009.

PharmaNet’s board of directors has approved the definitive merger agreement and the transactions contemplated thereby and have resolved to recommend that PharmaNet stockholders tender their shares in connection with the tender offer contemplated by the definitive merger agreement.

"The board of sirectors and I are very pleased to have a partner in JLL that recognises the substantial value we have built in the PharmaNet Development Group franchise," says Jeffrey P. McMullen, president and chief executive officer, PharmaNet Development Group. "We believe this transaction provides meaningful value to our stockholders while providing the solution to address the outstanding convertible notes."

"PharmaNet Development Group is well-positioned as a leading provider of outsourced clinical development services with a global infrastructure and an excellent reputation," says Ramsey Frank, managing director of JLL. "We look forward to working with the management team to enhance the company’s growth prospects and expand its portfolio of services."

The Merger Agreement provides for JLL to acquire PharmaNet in a two-step transaction. The first step will consist of a cash tender offer for all outstanding shares of PharmaNet common stock at a price of USD5.00 per share in cash. In the second step, the tender offer will be followed by a merger in which any untendered outstanding shares of PharmaNet common stock will be converted into the right to receive the same cash price per share paid in the tender offer.

UBS Investment Bank is acting as exclusive financial adviser to PharmaNet, and Morgan, Lewis & Bockius is acting as PharmaNet’s legal counsel in the transaction.

Latham & Watkins is acting as legal counsel in the transaction to the PharmaNet board of directors.

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