Drug-Trial Operator Quintiles Said to Consider IPO

Quintiles Transnational Corp. founder Dennis Gillings
One Equity had taken Quintiles Transnational Corp. private about a decade ago with a consortium led by founder Dennis Gillings, seen here, for about $1.7 billion. Photographer: Munshi Ahmed/Bloomberg

Quintiles Transnational Corp., the biggest provider of testing and drug-trial services to pharmaceutical companies, is studying an initial public offering, said two people familiar with the situation.

The company may file for the IPO in the next 18 months, said one of the people, who asked not to be identified because the talks are private. Quintiles was bought in 2008 by private-equity firms including TPG Capital and Bain Capital LLC in a deal that valued the company at $3.8 billion, including debt, another person said.

Quintiles is among the contract-research organizations whose revenue growth has accelerated as drugmakers outsource trials and testing, Moody’s Investors Service said in a Sept. 12 research note. The Durham, North Carolina-based company also hired new Chief Executive Officer Tom Pike in April and has bought up smaller competitors.

“I view the fact that they have a new CEO now as potentially a sign that they’re preparing their next leg of growth or next strategy, which could include an IPO,” Jessica Gladstone, a New York-based senior analyst at Moody’s, said in an interview. “An IPO could also be a way to reduce leverage and an exit strategy for the owners.”

The company hasn’t yet invited banks to pitch for roles on the sale, the people said.

Unwinding Investment

“Quintiles routinely evaluates its capital strategy, and it is our policy not to comment on these matters,” Phil Bridges, a spokesman for Quintiles, said in an e-mailed statement.

Quintiles had $3.53 billion in sales during the past 12 months, more than a quarter of the market made up by the 10-biggest contract research organizations, according to Moody’s. It had research partnerships with London-based AstraZeneca Plc, Tokyo-based Eisai Co. and Takeda Pharmaceutical Co., based in Osaka, Japan, according to the Moody’s report.

Its owners may be more eager to start unwinding the investment after U.S. stocks this month rallied to the highest since 2007. Bain and TPG bought Quintiles from One Equity Partners, the private-equity arm of JPMorgan Chase & Co. One Equity had taken Quintiles private about a decade ago with a consortium led by founder Dennis Gillings for about $1.7 billion.

3i Group Plc and Temasek Holdings Pte, Singapore’s state-owned investment company, also own stakes in Quintiles.

Quintiles has 25,000 employees in 60 countries, according to its website. Two of its next biggest competitors by sales are inVentiv Health Inc. and Catalent Pharma Solutions Inc., according to Moody’s.

Both are closely held by private equity firms. Blackstone Group LP bought Catalent from Cardinal Health Inc. in 2007 for $3.3 billion, and Thomas H Lee Partners LP bought inVentiv in 2010 for $1.09 billion.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE