INC Research’s major shareholders are selling 9 million shares of the company, a move that will mean they will no longer have a controlling interest in the Raleigh contract research organization.
Avista Capital Partners and the Ontario Teachers’ Pension Plan are selling 6 million shares at a price of $45.35 per share. In a separate transaction, the investors have also reached an agreement to sell 3 million shares back to INC Research at a price of $45 per share.
The shares amount to about 30 percent of the 30 million shares that the two investors own. INC won’t receive any of the proceeds from the sale.
INC is paying for the repurchase of shares with cash and by borrowing from one of its credit facilities.
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The offering of 6 million shares is expected to close on Dec. 7. It is not contingent on the closing of the share repurchase.
INC shares closed Wednesday at $43.38, down $4.23. The stock is up 68 percent this year.
INC is among the Triangle's stable of contract research organizations that test the safety and effectiveness of newly developed drugs for pharmaceutical companies.
INC went public in November 2014 at $18.50 a share. Before its public stock offering, 50.1 percent of the company was owned by Avista and its affiliates and 47.9 percent was owned by the Ontario Teachers’ Pension Plan. They continued to own a controlling stake in the business after the IPO.
As of Wednesday, Avista owned 27 percent of INC and the Ontario Teachers’ Pension Plan owned 26 percent. After the offering, Avista will own 20.1 percent and Ontario Teachers’ Pension Plan will own 19.3 percent.
Being a “controlled company” has meant INC is exempt from certain corporate governance requirements designed to protect shareholders, such as ensuring that a majority of the company’s board of directors are so-called independent directors.