Corporate News

LDC backs £83million MBO of Synexus to drive international growth

LDC has backed the £83million secondary buyout of Synexus as the management team targets further international growth. Synexus is one of the world’s largest patient enrolment and investigator site management organisations (“SMOs”) supporting pharmaceutical R&D through phase II, III & IV clinical trials

The business is a key bridge in the outsourced clinical research value chain, enrolling and managing patients for clinical trials on behalf of a number of leading pharmaceutical, biotechnology and contract research organisations clients including AstraZeneca, Glaxo SmithKline, J&J, Amgen, Covance, Pfizer, Roche, Quintiles, Paraxel, and ICON.

It specialises in five key therapeutic areas – cardiovascular, musculoskeletal, respiratory, endocrinology/metabolic and central nervous system.

Synexus operates a network of 25 owned Dedicated Clinical Research Centres (“DRCs”) in eight countries including the UK, Germany, Poland, Hungary, Romania, Bulgaria, Ukraine, and South Africa, which enables it to access a population of over 68 million potential patients on behalf of its clients. In addition, it has a network of 25 complementary affiliate sites which further increase Synexus’s market access capabilities. It employs over 600 people including 100 physicians solely dedicated to delivering trials.

Managing over 200 trials and thousands of patients at any one time, pharmaceutical companies and CROs utilise its scale and critical mass to deliver cost advantages and improve speed to market for new in-patent drugs. Synexus’s scale allows it benefit from its investment in best-in-class Quality Systems, dedicated Scientific Advisory Boards for each therapeutic area and a wide network of KOLs which provide valuable insight to customers. Its specialist enrolment and retention strategies address a key challenge in the global clinical trial industry in which almost 90 per cent of all trials undertaken are delayed due to slow patient enrolment which often result in reduced in-patent revenues.

LDC is backing the management team to realise a clear strategy for organic growth, using scale and expertise to continue to take share in what is a highly fragmented market comprising around 80,000 predominantly independent GPs/investigators globally. In addition, the team has a number of potential acquisition targets which will further enhance the customer offering and its geographic footprint.

The transaction sees Lyceum Capital exit its investment in full. It backed the buyout of the former AIM-listed business in 2007 and has supported Synexus’s organic and acquisitive growth into eight countries. Since 2011, the business has generated over 30 per cent per annum revenue growth, with revenue generated internationally increasing three fold. With LDC’s support, Synexus will continue to selectively expand its international DRC network and further invest in its operations and infrastructure.

The deal was led by LDC Director Ged Gould and Investment Directors Simon Braham and Chris Wright. The transaction is subject to competition clearance in Germany and is expected to complete in March 2015.

Ged Gould, Director and Co-Head of LDC in Manchester, said: “The pharma industry, alongside the rapidly expanding biotech sector is set for significant growth in the future driven by ageing populations and increasing R&D. This is an exciting area for investment and Synexus is leading a new generation of businesses offering expert clinical trial support that can help accelerate drug development for the benefit of patients.

“Christophe and the management team have done a fantastic job in building an international network and one of the top global players in this nascent industry in recent years and we are eager to further support the ongoing growth and help the business to break into new markets via both greenfield site openings and potential acquisition opportunities in the US, South America and Asia."

Dr Christophe Berthoux, CEO of Synexus, added: “Our services are critical to therapy development within some of the world’s leading pharma and biotech businesses, which provide a significant opportunity for us to take advantage of increased investment in our infrastructure and operations.

“Partnering with LDC provides us with the firepower and expertise to continue the expansion of our international network, allowing us to capitalise on further opportunities in the markets in which we operate.

“We are grateful to Lyceum, whose knowledge and experience have helped transform the business and put us in the best possible shape for this next exciting phase of growth.”

Bluebay and HSBC provided debt facilities to support the transaction.

LDC was advised on due diligence by EY (corporate finance, commercial due diligence), Deloitte (financial due diligence) and Dr Regenold, while DLA Piper provided legal advice, led by James Kerrigan. The vendors were advised by Fairmount Partners (Neal McCarthy), Travers Smith, KPMG and LEK.

Article Footnotes

Notes to Editors

  1. LDC is part of the Lloyds Banking Group and is authorised and regulated by the Financial Conduct Authority
  2. LDC back ambitious management teams from UK-based companies seeking between £2m and £100m of equity for management buy-outs, institutional buy-outs or development capital transactions.
  3. LDC invests in a broad range of sectors and has particular experience in Construction & Property, Financial Services, Healthcare, Industrials, Retail & Consumer, TMT, Travel & Leisure and Support Services.
  4. LDC has a UK regional network of 9 offices.