Founder Dennis Gillings and other key investors are selling 13 million shares in Quintiles, and the world’s largest life science services firm is buying $250 million of them through an underwriter.
It’s the second big sale by investors since March when they sold some 17.5 million.
The deal means Quintiles’ big investors now own less than 50 percent of the company and some changes in governance are coming as a result, a spokesperson says.
Quintiles (NYSE: Q) announced the secondary offering of shares Tuesday after the markets closed.
“These transactions are part of a normal and expected process of continuing to transition our shareholder base after the IPO last year,” said Phil Bridges, senior director of corporate communications for Quintiles. “They offer liquidity for major shareholders who have maintained positions in Quintiles for an extended period.”
Bridges also said the stock sale was not related to other action in the contract research organization market, which has been busy. PRA and INC Research, both based in the Triangle, are looking to go public. And Covance is being acquired by LapCorp in a $6.1 billion deal announced earlier this week.
“Quintiles’ actions are coincidental to other developments recently announced,” Bridges said.
Gillings owned some 19 percent of Quintiles shares as of earlier this year. Gillings along with Bain Capital, TPG Global and 3i Corporation are selling the shares.
Based on data as of Sept. 30, Bain owned 19.6 million shares or 15 percent, TPG held 14 million or 11 percent, and 3I owned 12.2 million or 9.6 percent.
The shares traded 3 percent lower at just over $57 in morning trading.
Quintiles went public in 2013 at $40 per share.
Citigroup is handling the underwriting, and Quintiles will repurchase shares worth $250 million through Citigroup, the company said.
Once the offering is complete, the investor group will no longer own more than 50 percent of the company’s shares. therefore it will no longer be a “controlled” company, Bridges explained.
“As a result of the underwritten offering, the ‘Selling Shareholders’ will own less than 50% of the total voting power of Quintiles, and Quintiles will cease to be a controlled company under NYSE rules.
“Under NYSE rules, controlled companies are corporations where a majority of the voting shares of stock are held by an individual or another company. This level of holding effectively places the holder or holders of the majority shares in a position to control the outcome of the voting on any shareholder issue.”
