CINCINNATI and RALEIGH, N.C.—In a joint announcemnt today,INC Research, LLC, a global contract research organization (CRO) focused ontherapeutics, and Kendle International Inc. announced the formation of adefinitive merger agreement, under which INC Research will acquire Kendle. Theacquisition will be an all-cash transaction with a total equity value ofapproximately $232 million. INC Research, which is privately held by AvistaCapital Partners and Ontario Teachers' Pension Plan, will acquire all ofKendle's outstanding shares at $15.25 per share in cash, which represents a60.5 percent premium over Kendle's closing share price as of May 4 and a 51.3percent premium over the company's 30-trading average of closing prices.
"Combining our highly complementary assets will provide thescale and scope for the combined company to deliver outstanding global teams,therapeutic expertise and operational excellence for clinical trials of allsizes," says Stephen Cutler, Ph.D., President and CEO of Kendle. "Because bothcompanies are known for conducting high-quality clinical work and share acommon culture based on excellent service delivery, we will be able to maintaina customer-centric focus on each individual project."
Kendle's Board of Directors approved the merger unanimously.The company's Annual Meeting of Shareholders was postponed from its originaldate of May 19, 2011, by the proposed transaction, and Kendle's Board ofDirectors will choose a different date. The transaction is expected to close bythe third quarter of 2011, pending approval from Kendle's shareholders and themeeting of customary closing conditions and regulatory approval. Cutler callsthe merger "the right decision for our customers and shareholders."
The merger of the two CROs is a strong move for bothbusinesses. Kendle brings with it considerable expertise in Phase I-IV clinicaldevelopment, as well as more than 3,000 business associates in 31 countries.The company's focus, according to its website is on "innovative solutions thatreduce cycle times for our customers and accelerate the delivery oflife-enhancing products to market for the benefit of patients worldwide."
INC Research is a full-service CRO that also works withprogram in Phases I-IV development, as well as in "innovative pediatric andwomen's health trials," according to the company's website. Like Kendle, theyalso have a global reach, offering "full service CRO support in 40 countriesworldwide, across six continents," including such countries as China, India,the United Kingdom, Russia and Brazil. The merger will combine the two into aCRO with global reach as well as extensive therapeutic program capabilities,placing them highly among other CROs based on size.
"The combination of INC Research and Kendle will enable usto deliver broader capabilities and reach a critical mass for the emerging drugdevelopment outsourcing and alliance partnership models," says James Ogle, CEOof INC Research. "Together, we bring complementary strengths and expand thebreadth and depth of services and expertise that are most valuable to ourcustomers."
Kendle's financial advisor for the transaction is J.P MorganSecurities LLC, and its legal advisor was Muething & Klekamp PLL. INCResearch brought on Morgan Stanley & Co. Inc. as financial advisor and WeilGotshal & Manges LLP as legal advisor for the deal.
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