The contract research organization giant ICON plc (NASDAQ: ICLR) is growing its market reach through the acquisition of PRA Health Sciences, Inc. (NASDAQ: PRAH). The deal is valued at $12 billion, with the per share merger consideration consisting of $80 in cash and 0.4125 shares of ICON stock. The consideration represents an approximately 30% premium to PRA’s closing price as of February 23, 2021. The transaction value comes out to around 3.77x revenue and 20.2x EBITDA, annualized.
PRA is one of the world’s leading global contract research organizations by revenue, providing outsourced clinical development and data solution services to the biotechnology and pharmaceutical industries. PRA’s global clinical development platform includes more than 75 offices across North America, Europe, Asia, Latin America, Africa, Australia and the Middle East and approximately 19,000 employees worldwide. Since 2000, PRA has participated in approximately 4,000 clinical trials worldwide.
PRA shareholders will own approximately 34 percent of the shares of the combined company and ICON shareholders will own approximately 66 percent.
The transaction is anticipated to be highly accretive, delivering double-digit accretion in the first full year and growing to more than 20% thereafter, driven by growth momentum, estimated annual run-rate cost synergies of $150 million, and the combined effective tax rate decreasing to 14%, both to be realized in approximately four years.
ICON last reported a deal around a year ago in February 2020, according to search results in our Healthcare Deals Database. For an undisclosed sum, the company bought MedPass International, a leading European medical device contract research organization. The company has served more than 1,000 medical device companies, from start-ups to multi-nationals, and has contributed to the development of hundreds of innovative devices including a number of breakthrough technologies.
