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Scoop: Webster's CenExcel process on ice, sources say

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Illustration: Sarah Grillo/Axios

After conducting management presentations, Webster Equity's auction process for clinical site manager CenExel has gone pencils down, two sources familiar with the matter tell Axios.

Why it matters: While pharma services is a hot area for private equity, valuation uncertainty is putting a wrench in the health care dealmaking gears.

The latest: Advisers for CenExel, including Goldman Sachs and Rothschild, took first-round bids three weeks ago, the sources tell Axios.

  • Blackstone was among the bidders, as the process was targeted toward large-cap sponsors, they say.
  • Salt Lake City-based CenExel is angling for a valuation in the $1.2 billion to $1.5 billion range.

Yes, but: Prospective buyers are concerned about CenExel's business not being integrated enough, the sources say. Since Webster invested in 2018, CenExel has completed at least six add-ons.

  • One source says CenExel hasn't invested enough into its technology backbone, with the business having "seen lots of EBITDA adjustments."

Catch up quick: The process launched at the start of this year and CenExel is marketing itself on about $85 million, PE Hub reported in January.

How it works: CenExel is a clinical research site manager, mostly conducting studies in post-op pain, neurology and psychiatry on behalf of pharmaceutical companies.

  • The company offers study services spanning from patient recruitment, and screening and enrollment to medical procedures and monitoring.

Zoom in: Since Webster invested, CenExel has acquired clinical site businesses and research organizations based in California, Colorado, Florida and Georgia.

  • Those acquisitions spanned across several disease areas, including dermatology and neurology.

The big picture: Private equity likes the clinical trial market for its fragmentation, as well as industry tailwinds like expanding U.S. pre-clinical pipelines and augmented R&D budgets.

  • GHO is looking to sell its clinical trial services provider Velocity Clinical Research, Axios reported in March.

Webster, CenExel, Goldman, Rothschild and Blackstone did not respond to Axios' requests for comment.

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