PE fund commits $1.1B to inVentiv buyout

The stock market might be iffy about healthcare reform's short-term effects on drugmakers, but a private equity firm has just placed a $1.1 billion bet that a pharmaceutical services firm will thrive under the new law.

The private equity fund Thomas H. Lee Partners agreed to buy inVentiv Health in a $26-per-share deal, plus debt assumptions. The share price amounts to 7 percent premium to yesterday's closing price, but is more than 50 percent higher than Inventiv's price back in March, just before the company announced a possible sale.

InVentiv CEO Blane Walter says in a statement that the company is fortunate to have found an investment partner that "understands the complexities of the healthcare industry and that is committed to working with inVentiv" on long-term growth. And THL Partners said inVentiv's outsourcing services present "numerous opportunities" for continued expansion.

As drugmakers look for ways to streamline their operations and cut costs, they have increasingly turned to services firms such as inVentiv to take on functions that once were considered "core" operations--and to develop programs, such as patient-compliance campaigns, that they didn't have time to handle in-house. As U.S. healthcare reform rolls out, demand for these services is likely to grow, analysts told Dow Jones.

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