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Scoop: Pamplona starts Calyx sale process

Aug 10, 2022
Illustration of a syringe pulling from a vial with a hundred dollar bill as a label.

Illustration: Aïda Amer/Axios

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.

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