Axios Pro Exclusive Content

Scoop: Auctus preps PharmaLex sale

Apr 28, 2022
Illustration of falling pills surrounded by abstract shapes and sections of dollars.

Illustration: Gabriella Turrisi/Axios

Auctus Capital Partners is gearing up for a sale of PharmaLex Group, a Germany-based global pharma services platform, four sources tell Axios.

Why it matters: The rapid development of new therapies and their increasing complexity, along with the shift to more targeted drug marketing spend, is driving up demand for pharma commercialization and clinical development services.

  • Investors are eager to get in the space, and likely to its benefit, PharmaLex is one of few scale opportunities currently available for investment.
  • The other big commercialization deal brewing is Amulet Capital's Open Health, whose sale process is anticipated to launch next month, Axios wrote previously.
  • Elsewhere, sources say the Jefferies-run process for Genstar Capital's Advarra — the country's largest institutional review board (IRB) — kicked off earlier this month.

What's happening: Harris Williams is engaged to advise Germany's Auctus on a potential sale of PharmaLex. Timing of the process is not clear.

  • PharmaLex’s LTM EBITDA is in the mid-60 million euro range, whereas forward EBITDA is about 70 million euros, sources say.
  • Baird was hired in 2018 for a potential sale, but the company ultimately did not come to market, sources say.

Zoom in: PharmaLex, with over 1,700 employees worldwide, offers various specialized services to support pharma, biotech and medtech companies through the full product lifecycle.

  • That includes offerings that support strategic planning activities and non-clinical requirements, to clinical development, and ultimately through regulatory submission processes, market approval and product maintenance post-launch activities.

The big question: How integrated is the platform given how many acquisitions it has made?

  • By PitchBook's count, at least 23 acquisitions have been inked since October 2015, and the platform has 12 subsidiaries. That includes four acquisition announcements already this year.
  • In March, it merged with Italy's EBMA Consulting, and in February, it merged with Tokyo's Ascent Development Services to expand its reach to Japan, East Asia and Southeast Asia.

What we're watching Value expectations are not clear, but relevant assets have been trading at multiples in the high teens to 20x-plus EBITDA range. (If consistent with those trades, we're talking a 1 billion euro-plus deal.)

  • Global or European sponsors are likely acquirers, but expect PharmaLex to garner interest from U.S. buyers as well, sources say.

Auctus, PharmaLex and Harris Williams did not return Axios' requests for comment.

Go deeper