Gillings and other Quintiles investors hope to cash out

Posted by David Ranii on March 10, 2014 

2011 NEWS & OBSERVER FILE PHOTO

Dennis Gillings, co-founder and chairman of pharmaceutical services giant Quintiles, could reap more than $200 million by selling a chunk of his holdings in the Durham-based company.

Gillings and a group of other shareholders, including several private equity firms, collectively hope to sell stock valued at up to $939.3 million to the public, according to information filed Monday with the Securities and Exchange Commission.

The shareholders are planning to sell 17.25 million shares, and the underwriters have an option to purchase an additional 2.25 million shares from them.

Shares of Quintiles closed Monday at $54.30, up 19 cents. The company raised nearly $950 million last May when it went public at $40 per share.

“This offering would enable our private equity sponsors to diversify their positions. Quintiles itself is not offering any stock,” Quintiles spokesman Phil Bridges wrote in an email. “As such, the company would not receive any funds from the offering.”

He added: “With this filing, Quintiles has entered into a traditional ‘quiet’ period as required by the Securities and Exchange Commission so it is inappropriate for me to comment further.”

Gillings, who currently owns a 19 percent stake in the business, would see his ownership reduced to 15.6 percent if the offering goes through as planned and the underwriters exercise their option.

The combined ownership stake of Gillings and three private equity firms – Bain Capital, TPG Funds and 3i Funds – would be reduced from 65 to 53 percent.

That would still leave Quintiles a “controlled company” that is exempt from certain corporate governance requirements designed to protect shareholders. For example, a majority of the company’s board of directors isn’t required to be so-called independent directors.

Quintiles is the world’s largest contract research organization, or CRO, helping pharmaceutical and biotechnology companies test experimental drugs and analyze the results. It also assists those companies with selling and marketing medicines after they receive regulatory approval.

The company has 28,200 workers worldwide and 2,300 in the Triangle.

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