Quintiles’ plans for $2.43 billion in bank financing have been put off indefinitely due to what the clinical research organization now describes as “recent unfavorable global credit market conditions.”
In postponing the financing, the Durham, N.C.-based CRO also said it would terminate its tender offer to pay cash to buy up to $525 million of 9.5 percent outstanding senior notes that are due in 2014.
Quintiles earlier this month announced it had reached preliminary terms with J.P. Morgan and several other banks for loans totaling $2.43 billion. Most of the money was intended to refinance $1.7 billion of debt for Quintiles Transnational Holdings, Quintiles’ parent company. The rest would be used for acquisitions and partnerships with pharmaceutical companies.
Quintiles said at that time it was seeking the refinancing arrangement because of favorable conditions in the financial markets. But in the span since that announcement, oil prices have continued their upward march amid growing tensions in the Middle East and the after effects of the earthquake and tsunami in Japan continue to wrack that country’s economy, with impacts felt globally among companies that do business with Japanese firms.
Phil Bridges, a spokesman for privately-held Quintiles, said that the favorable terms that Quintiles saw for most of the first quarter are no longer available. But he added that the refinancing was not a necessary deal for the company, which has enough cash to continue pursuing deals with pharmaceutical companies.
“It will not keep us from partnering, investing, making deals with customers,” Bridges said.
Quintiles is the largest CRO in the industry with about $3 billion in annual revenue coming from running clinical trials and providing various services for pharmaceutical companies. The company has global operations spanning 60 countries.