Quintiles hoping to raise nearly $790 million in IPO

dbracken@newsobserver.comApril 26, 2013 

Pharmaceutical services giant Quintiles is now hoping to raise about $790 million in an initial public offering of stock.

In an updated regulatory filing, Quintiles reported that it hopes to offer about 19.7 million shares at an offering price of between $36 and $40 per share. The offering is scheduled for May 9.

The Durham company itself plans to issue about 13.8 million shares, and expects proceeds would total $489.8 million assuming an IPO price of $38 per share. The remainder of the money raised from the IPO would go to the company’s major shareholders, including founder and Executive Chairman Dennis Gillings and four private equity firms: Bain Capital, TPG Capital, Temasek and 3i Corp. They are seeking to sell nearly 5.2 million shares.

The company’s underwriters also have the option of purchasing an additional 2.96 million shares from the major shareholders, which could bring the total raised in the IPO to more than $900 million.

Quintiles investment banks are giving the company a market value of about $4.9 billion. The total shares being offered represent about a 15 percent stake in the company.

John Fitzgibbon Jr., who tracks new stock offerings for IPOScoop.com., said the size and suggested pricing of the offering reflects the fact that Quintiles is an established company that will be attractive to major institutional investors.

“It certainly qualifies for an institution to put in their portfolio,” he said. “It would pass muster with the investment committees.”

Gillings, who founded the company in 1982, and the private equity firms would still own roughly 70 percent of the company after the IPO. Gillings’ stake would be reduced from 23.7 percent to 20 percent.

Quintiles said in its latest filing that the company intends to use $356 million of the proceeds from the IPO to pay off some of its $2.4 billion in debt.

An additional $25 million would be used to pay Gillings and the other major shareholders a termination fee for halting the millions in management service fees that they have shared since 2008. The remainder of the proceeds would be used for general corporate purposes.

Quintiles is best known as a contract research organization that helps pharmaceutical and biotechnology companies test experimental drugs. In addition to its CRO business, which accounts for nearly three-quarters of its revenue, it also assists those companies with selling and marketing medicines once they win regulatory approval.

Quintiles was publicly traded from 1994 until 2003, when Gillings, frustrated with running a publicly traded company, engineered a $1.7 billion leveraged buyout.

The company generated $3.7 billion in revenue last year, up 12.1 percent from 2011, and has more than 2,000 employees in the Triangle and 27,000 worldwide. Quintiles estimated that it generated $927 million in revenue in the first quarter, up 4.4 percent from a year earlier.

The company has applied to trade on the New York Stock Exchange under the symbol “Q.”

Bracken: 919-829-4548

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