Investment Groups Acquire Syneos Health for $7.1 Billion
By Alex Keown
May 11, 2023
Shares of Syneos Health jumped more than 19% on May 10 after a consortium of investors announced plans to acquire the Research Triangle Park-based clinical research company for $7.1 billion, an all-cash transaction. The consortium intends to take the company private following the sale.
Elliott Investment Management, Patient Square Capital and Veritas Capital made a play for the Morrisville-based Syneos for $43 per share, which they said represented a 24% premium over the share price on Feb. 13, which was the last day of trading before media speculation regarding the deal. Following the completion of the transaction, expected later this year, Syneos will become a private company. Its shares will no longer trade on the Nasdaq Exchange.
The company is expected to maintain its global headquarters in North Carolina.
News of a possible acquisition first rose in February. Reuters reported the company was looking for a possible buyer due to a reduced backlog of clinical research contracts led to a halving of the company’s share price. Reuters also reported that Syneos has faced challenges winning new business due to a downturn in spending from small and medium-sized biotech companies that have been impacted by fundraising difficulties and a post-COVID-19 market downturn.
John Dineen, Chair of the Syneos Health Board of Directors said the agreement is the culmination of a comprehensive review of opportunities. He noted the board unanimously approved the acquisition and believes it is in the best interests of both the company and its stakeholders.
“The company has a strong operating foundation, differentiated, integrated solutions and a focus on being committed to customers. We believe this transaction will enable Syneos Health to continue to accelerate its growth strategy, enhance customer delivery and evolve the organization toward a tech-enabled future,” Dineen said in a statement.
Mark Steinberg, Senior Portfolio Manager at Elliott Investment Management, said Syneos Health is at an important stage in its evolution. The acquiring partners will provide support as the company bolsters its core capabilities toward the next phase of growth, he said.
Ramzi Musallam, Chief Executive Officer and Managing Partner of Veritas, pointed to the clinical research and commercialization work Syneos performs, calling it “mission critical” to the pharmaceutical industry. The acquisition will enhance the ability of Syneos Health “to deliver medical innovations” to patients across the globe, Musallam said in a statement.
Jim Momtazee, Managing Partner of Patient Square echoed his partners in the acquisition. In a brief statement, Momtazee said contract research and commercial organizations provide significant value to clients by maximizing the likelihood of clinical success. Syneos Health, he said, has “world-class employees” and a strong foundation that benefits client companies.
Over the past several months, Syneos has made several strategic moves to bolster growth opportunities, including additions to its C-suite. Earlier this month, the company appointed Michael Bonello to the role of Chief Financial Officer. In April, Jeanine O’Kane was named President of Syneos Health Communications after previously serving as President of the US Public Relations Group at Syneos Health Communications.
Syneos Health has also struck several collaborations. Most recently, the company forged a data-driven predictive analytics partnership with New York-based KX, the maker of analytics engine kdb, to create a new class of data and AI management engine. As BioBuzz previously reported, the collaboration between the two companies is expected to provide customers with data-driven predictive analytics, AI and machine learning capabilities.
Syneos also entered into a collaboration with Microsoft to leverage AI-ready technology that will accelerate asset development and optimize performance. The partnership harnesses the capabilities of Microsoft Azure services and pairs it with Syneos’ advanced analytics platform to support the analysis, design and execution of clinical trials and commercial programs across the globe.
Simultaneous to the announcement of the acquisition, Syneos also released its quarterly financial results. The company posted $1.35 billion in revenue for the first three months of the fiscal year. That was a 1.5% increase over the same period the year before.
In its financial report, Syneos noted an improvement in its backlog compared to 2022. As of March 31, 2023, the company’s clinical backlog was valued at $9.83 billion, a 15.5% improvement over the same time in 2022 when the backlog was valued at $11.6 billion.
- About the Author
- Latest Posts
Alex Keown is a freelance journalist who writes about a variety of subjects including the pharma, biotech, and life science industries. Prior to freelancing, Alex has served as a staff writer and editor for several publications.
