Scoop: Pamplona starts Calyx sale process
Pamplona Capital is seeking a buyer for Calyx, the clinical trial tech and medical imaging arm that spun out from Parexel before its $8.5 billion buyout last year, multiple sources tell Axios.
Why it matters: Calyx sits smack in the middle of a hot sector experiencing strong tailwinds and commanding tons of private equity interest.
- Along with Clario and WCG, other sponsor-backed platforms include Nordic's ArisGlobal, Blackstone and CPP Investments' Advarra, GI Partners' Clinical Ink, and others.
What's happening: A broad auction kicked off last week for Calyx via Jefferies, sources say.
- The process is targeting traditional private equity and special situation vehicles.
Details: The company is marketing adjusted EBITDA in the negative single-digits, just south of breakeven, some of the people say. Top line revenue is around $275 million, one source adds.
- Calyx Medical Imaging is the company's largest and perhaps most valuable unit, representing about 50% of the business, one of the sources says.
- Competitors to Calyx Medical Imaging include WCG, a portfolio company of Leonard Green, Arsenal Capital and Novo; and Clario (formerly ERT and Bioclinica), backed by Nordic Capital, Astorg and Novo.
- Calyx's Interactive Response Technology unit accounts for about 30% of the business. IRT aims to optimize randomization and clinical trial supply (RTSM) processes.
- The company's remaining two core businesses are software programs around electronic data capture and clinical trial management.
Catch up quick: Calyx has been transitioning out of an ownership structure where it was arguably under-loved and under-invested, consistent with its financial profile.
- Previously a subsidiary of CRO Parexel, Calyx split from the company in January 2021 and became a separate, independent company. Seven months later, EQT and Goldman Sachs bought Parexel from Pamplona Capital — leaving the latter with Calyx.
- Since businesses like Calyx typically sell to a variety of CROs, separating from Paraxel made sense — though carveout costs may have temporarily impacted Calyx's financials, sources say.
Of note: Pamplona's previous holding in Parexel, and hence, Calyx, is among investments with ties to its largest LP, LetterOne Holdings, per Bloomberg.
- That matters because Pamplona in March disclosed plans to liquidate each fund linked to LetterOne amid the E.U.'s sanctioning of its co-founders, Russian billionaires Mikhail Fridman and Petr Aven.
The bottom line: We have no idea who buys Calyx or where value lands if a deal is reached, but Pamplona, given the above, is presumably a very determined seller.
Pamplona and Jefferies declined to comment.