Quintiles capitalizes on hot bond market, raises $525 million

Posted Dec. 7, 2009 at 6:17 a.m.

Quintiles capitalizes on hot bond market, raises $525 million

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RERSEARCH TRIANGLE PARK, N.C. – Life sciences services and investment firm Quintiles cashed in royally on a recent boom in corporate bond market by selling $525 million of so-called senior notes on Friday.

Earlier in the week, Quintiles was reported by two different Wall Street related services to be preparing plans to sell $400 million as part of a strategy to pay special dividends and to invest additional funds in its private equity group.

However, on Friday, the bond amount was increased to $525 million, according to the Thomson Reuters service called IFR.

Contacted on Saturday, a Quintiles spokesperson declined to divulge any details beyond what Quintiles had provided to Local Tech Wire and WRAL.com earlier in the week.

“We don’t expect to make any additional information available at this point about our plans,” the spokesperson said.

Quintiles is privately held.

Morgan Stanley and Citi handled the bond sale.

According to the Wall Street Journal, $275 million of the proceeds will go to Quintiles investors Bain Capital and TPG Capital.

Other proceeds will be used for PharmaBio Development, the Quintiles group that invests in life science companies, according to Moody’s Investors Service. That group will be spun off to Quintiles shareholders, Moody’s said.

Quintiles would not discuss its plans with LTW and WRAL.com other than information provided on Wednesday.

The funds would be used to “provide a return on investment” to shareholders and also is setting up a new holding company parent for Quintiles, said David Coman, senior vice president of communications and patient recruitment.

The specifics he disclosed:

• “Establish a new holding company, Quintiles Transnational Holdings Inc., which will be the legal parent of Quintiles Transnational Corp.
• “Make use of positive financial market conditions to raise capital via credit
• “Provide a return on investment to our shareholders largely through the distribution of dividends”

Quintiles is largely owned by TPG Capital and Bain Capital. In 2008, the firms bought the ownership share of One Equity partners for a reported price in excess of $3 billion and became the lead investors in Quintiles.

Dennis Gillings, the founder, chairman and chief executive officer of Quintiles, remains an investor and head of the company. Other investors in Quintiles include 3i and Temasek Holdings.

Gillings took Quintiles private in 2003 in a deal valued at $1.7 billion. He worked with One Equity and others on that deal.

“These are all positive events that place us in the best position to continue providing our customers with industry-leading professional services from our 23,000 talented people around the globe,” Coman said.

Asked why Quintiles chose to create a new holding company, Coman explained:

“These actions afford future financial flexibility for Quintiles. Establishing a new holding company represents a change to our legal structure that does not directly affect day-to-day operations.”

The changes “do not constitute any shift in Quintiles’ ownership.”
The moves did not affect Quintiles’ credit rating from either Standard & Poor’s or Moody’s, those firms said Tuesday.

Gillings launched the company in 1982 while working as a professor at the University of North Carolina at Chapel Hill.

Tags: Biotech & Life Science, Quintiles

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