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Quintiles Staying Quiet About Bond Sales

Quintiles Staying Quiet About Bond Sales [The Herald-Sun, Durham, N.C.]

From Herald-Sun (Durham, NC) (December 8, 2009)

DURHAM, N.C., Dec. 8 -- Quintiles Transnational Corp. executives were keeping quiet Monday as reports of the company raking in $525 million on the bond market trickled out over the news wires.

Phil Bridges, a spokesman for the global clinical research organization headquartered in Durham, said he couldn’t share any information at this time.

"Regarding the Quintiles bond sales, we don’t expect to make any additional information available at this point about our plans," he said in an e-mail.

But according to sources including The Wall Street Journal and Thomson Reuters, the privately owned company has been in the process of selling seniors notes, a preferred form of investment among institutional investors.

IFR, a Thomson Reuters service, reported Friday that Quintiles Transnational Holdings Inc., apparently a newly formed holding company for the CRO, had sold $525 million of senior notes in the 144a private placement market.

The size of the sale was increased from an originally planned $400 million, IFR said, with Morgan Stanley and Citi the joint bookrunning managers.

Meanwhile, a Wall Street Journal blog on private equity reported that Quintiles plans to use $275 million of the sale to pay Bain Capital and TPG Capital, private equity groups based in Boston and San Francisco.

In 2008, those two investors became the majority owners of Quintiles after buying out the shares of One Equity Partners, the private equity arm of JPMorgan Chase, for $3 billion.

Adam Bianchi, founding partner of Cutting Edge Information, a pharmaceutical industry research and consulting firm in Durham, said creating a holding company and paying down some debt would be a positive for Quintiles, making it easier for the company to grow and possibly acquire other companies in the future.

"Depending on the holding company, it can make business more complicated, but it also opens up more flexibility as well," Bianchi said. "If Quintiles wants to do a big acquisition, they can do it through the holding company. For a small acquisition, they can do it through the main business."

"With a holding company, you can manage those legal and financial issues over a longer period of time, which takes the sting out of it," he added. "That’s not necessarily saying that Quintiles wants to do any big mergers and acquisition, but I wouldn’t be surprised if they did."

Quintiles has grown in revenue even in this recession and industry-wide downturn. The company had moved into its brand new 11-story headquarters off Interstate 40 earlier this year.

Chairman and founder Dennis Gillings, a former biostatistic professor at UNC Chapel Hill, told The Herald-Sun in May that the company had revenues of $3 billion in 2008, up from $2.4 billion in 2007.

"There’s been a lot of money that’s been locked up 18 to 24 months that people have been sitting on. That money is starting to flow again," Bianchi said. "Overall, if you look at the top 500 or top 1000 stocks, Quintiles is definitely an attractive investment."

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Posted: December 2009