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Charles River to purchase MPI Research
Posted on Tuesday, 13 February 2018 14:43
US pharmaceutical and biotechnology laboratory research services provider Charles River Laboratories International is picking up domestic rival MPI Research in an all-cash transaction.
Based on the estimated 2017 results, the USD 800.00 million consideration implies an 11.7x earnings before interest, taxes, depreciation and amortisation (EBITDA) multiple on a non-generally accepted accounting principles bases.
Following the acquisition, consolidated revenue is expected to increase by USD 170.00 million to USD 190.00 million in 2017, and by USD 260.00 million to USD 280.00 million in 2019.
The deal, which will be financed through an expansion of the Charles River’s existing credit facility and cash, is anticipated to generate USD 13.00 million to USD 16.00 million in operational synergies in 2019.
Subject to certain closing conditions, completion is slated for early in the second quarter of 2018.
Based in Michigan, contract research organisation (CRO) MPI Research conducts imaging, drug safety, discovery sciences, surgical, medical device evaluation, bioanalytical, and analytical studies for biopharmaceutical and medical device companies.
It provides services to a variety of therapeutic areas, including biomarker testing, infectious diseases, neurosciences, oncology, and stem cell therapeutics.
Charles River is headquartered in Massachusetts and, as of 12th February 2018, it had a market capitalisation of USD 4.83 billion.
It reported net income of USD 154.52 million and total revenue of USD 1.38 billion for the nine months ending 30th September 2017.
The buyer claims the transaction will enhance its position as a “leading early-stage CRO”, offering support to the pharmaceutical, biotechnology, and medical device industries.
Chief executive James Foster said MPI Research has “access to growing end markets, high-quality services, scientific expertise, and complementary capabilities”, and that its “one-million-square-foot, single-site facility in Michigan will provide needed capacity to meet current and future demand”.
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