CRO merger: INC Research to buy Kendle for $232 million | Acquisitions roundup

May 6, 2011 By MedCity News Leave a Comment

Cincinnati-based contract research organization Kendle International Inc. (NSDQ:KNDL) has solved its “acquire-or-be-acquired” dilemma.

Kendle agreed to sell itself to Raleigh, N.C.-based CRO INC Research LLC for $232 million, according to a statement from the companies.

The selling price of $15.25 per share represents a 60.5 percent premium over Kendle’s closing share price on Wednesday. Kendle’s board of directors has unanimously approved the deal, which is expected to close next quarter.

“The combination of INC Research and Kendle will enable us to deliver broader capabilities and reach a critical mass for the emerging drug development outsourcing and alliance partnership models,” said James Ogle, CEO of INC Research.

The two companies no doubt figure that a combined entity will be better positioned to compete with bigger CROs like Quintiles, Icon plc (NSDQ:ICLR), Covance Inc. (NYSE:CVD) and Pharmaceutical Product Development Inc. (NSDQ:PPDI).

The CRO market is expected to flourish, growing up to 50 percent in the next five years, Morningstar equities analyst Lauren Migliore told MedCity News last month. Drugmakers need to replenish their pipelines as many big sellers go off patent, meaning they’ll have to invest significantly in development. Further, CROs often have greater expertise than pharma companies when it comes to developing drugs in certain therapeutic areas and deeper experience in running clinical trials in a wide array of geographies.

Kendle had been stuck in a bit of in-between stage, too small to compete with the big CROs but large enough to have a fairly significant international presence. Analysts have long opined that the company needed to quickly grow either through buying up smaller CROs or being bought itself.

With today’s announcement, Kendle has made its choice.

Here’s a roundup of companies announcing mergers, acquisitions and divestitures.

PerkinElmer acquires Geospiza
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Zargis stays silent on 3M asset acquisitions
Zargis Medical Corp., a Stamford, Conn.-based developer of software used to detect and analyze heart murmurs would not say how the sale of "certain assets" to 3M Co. (NYSE:MMM), will impact the business, reports the Stamford Advocate. Management at Zargis did not return telephone calls to the publication about the deal that 3M announced last week.
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Arcadia Solutions is acquiring Chelmsford, Mass.-based Concordant Inc. to address the ambulatory health care IT market. Burlington, Mass.-based Arcadia is a health care consulting firm. The companies did not disclose the financial terms of the deal, reports MassHighTech.
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Additive manufacturing system maker Stratasys Inc. (NSDQ:SSYS) acquired Solidscape Inc. for $38 million plus certain purchase price adjustments. New Hampshire-based Solidscape is a manufacturer of 3D printers serving investment casting applications in the jewelry, medical, dental and industrial markets. The company’s technology produces patterns that are used to cast highly precise metal parts.
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CryoLife closes tender offer for 49.9 percent Cardiogenesis’ shares
CryoLife Inc. (NYSE:CRY), an implantable biological medical device and cardiovascular tissue processing company, announced the completion of its tender offer, through its wholly owned subsidiary CL Falcon Inc., for 49.9 percent of the outstanding shares of Cardiogenesis Corporation ("Cardiogenesis") (OTCQB: CGCP). The tender offer expired at 12:00 midnight, Eastern Time, at the end of the day on May 2.
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Coast Dental to acquire the assets of SmileCare
Coast Dental Services Inc., announced that it has entered into an agreement to acquire the assets of Dental Technology Inc. (DTI), doing business as SmileCare, and Community Dental Services Inc., a California licensed health care service plan. DTI and its subsidiaries operate 57 SmileCare dental practices in California, Nevada and Texas, employing 1,200 staff members, including 130 dentists. The transaction is expected to close upon final approval by the California Department of Managed Health Care.
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Techne acquires Tocris Holdings
Techne Corp. (NSDQ:TECH) announced that it has acquired 100 percent ownership of Tocris Holdings Limited and subsidiaries, a supplier of reagents for non-clinical life science research. Tocris’ products are used in both in-vitro and in-vivo experiments, to understand biological processes and diseases. The business is focused on making biologically active neuro- and bio-chemicals which are used by researchers to elucidate biological processes and pathways. The products are used in life-science research activities and as part of the initial drug discovery process.
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