Consortium to acquire Syneos Health for $7.1bn

A contract research firm, Syneos Health Inc, has been acquired by an investment consortium comprising Elliott Investment Management, Patient Square Capital, and Veritas Capital, in a deal valued at $7.1 billion, including debt. Syneos Health announced the deal on Wednesday, and the news caused its shares to rise by 10.4% before the bell.

The consortium has agreed to pay about $43 per share in cash, which represents a premium of around 12% compared to Syneos Health’s last close of $38.45. The acquisition comes at a time when the company is experiencing challenges in securing new business, as many of its clients, which include medium-sized biotechs, have cut spending due to difficulties in raising funds in a post-COVID-19 market downturn.

The private-equity firms’ acquisition of the Baxter International biopharma solutions unit for $4.25 billion was agreed to a few days before the Syneos Health acquisition. Private-equity firms have recently been investing in the drug development sector, which was previously deemed risky, by coming up with deals that compensate them for the uncertainty involved.

The acquisition of Syneos Health by the consortium is expected to provide the firm with a financial boost and could enable it to weather the current market challenges. Furthermore, the consortium’s involvement suggests that the drug development sector is becoming an increasingly attractive investment opportunity for private-equity firms.