In the largest healthcare buyout announced in the US so far this year, Pamplona Capital Management has agreed to acquire Massachusetts-based Parexel (NASDAQ: PRXL) in a cash transaction valued at about $5 billion. Pamplona will pay $88.10 per share, representing a 27.9% premium to Parexel’s stock price the day before reports of a possible sale emerged.
The deal is one of
the largest buyouts of any kind announced so far during 2017, per the PitchBook Platform. Below is a rundown of the five biggest buyouts agreed to during the first six months of the year, including a restaurant chain, a seller of pet products and a distributor of lab materials (dates listed are the date of the announcement):
For Pamplona, the acquisition continues a recent push into bigger-ticket deals. Until the start of last year, the firm had never spent more than $2 billion on any single transaction, per PitchBook data. Now, Pamplona has participated in three such deals in the past 18 months. In January 2016, the firm completed a take-private purchase of nThrive (fka MedAssets) for $2.7 billion. Later last year, meanwhile, Pamplona provided $600 million in preferred equity financing to support the $5.5 billion merger of outdoor retailers Bass Pro Shops and Cabela’s.
The Parexel transaction also illustrates PE’s ongoing willingness to spend billions on medical companies. While the frequency of buyouts topping the $5 billion mark is on the decline across the US as a whole—just one deal has been completed so far this year,
compared to 10 in 2015, according to the PitchBook Platform—the healthcare sector has displayed some resilience.
The sole buyout over $5 billion to be finalized so far in 2017 is Blackstone’s takeover of Team Health, a provider of physician services. The largest recent PE takeover in the space, meanwhile, occurred last June, when a consortium including Hellman & Friedman and Leonard Green & Partners purchased MultiPlan, a provider of healthcare cost management services, for $7.5 billion.
Across deals of all sizes, in fact, PE’s interest in healthcare continues to grow. Deal count in the space has risen each of the past five years, per PitchBook data, with another 337 transactions completed so far in 2017.