Piramal Healthcare, an innovation led company has agreed to acquire Decision Resources Group (DRG), a US based company in the healthcare information segment, for a consideration of approximately US$ 635 million i.e. Rs. 3,400 crore. DRG provides high quality, web-enabled research, predictive analytics via proprietary databases and consulting services to the global healthcare industry.
With 20 per cent CAGR for the last five years, it is one of the fastest growing companies in the US$ 5.7 billion global healthcare information industry. DRG projects revenues of US $ 160 million for 2012. 48 of the top 50 global pharmaceutical companies are its customers and it has an overall customer retention rate of 95 per cent.
DRG is focused on three market segments: namely the biopharma business unit which provides reports, databases and advisory services on drug utilisation trends and forecasting in a variety of therapeutic areas; the market access business which provides database and analytical services that healthcare companies use to assess the current and future opportunity of their products' acceptance into a market; and finally the medical technology business which provides actionable insights and data on the medical device markets.
DRG's products include detailed market assessments based on a specialised network of over 125,000 healthcare professionals (primarily physicians), proprietary databases of market information and detailed analytical reports on specific therapeutic areas. The three market segments that DRG covers are worth approximately US$ 2.5 billion, leaving considerable room for DRG to continue to grow its revenues.
After the sale of its healthcare solutions business to Abbott Laboratories in May 2010 for US$ 3.8 billion Piramal Healthcare has embarked on a strategy to acquire global growth businesses with sustainable returns. Commenting on the DRG acquisition, Ajay Piramal, chairman of Piramal Healthcare said, "The global healthcare industry is facing several challenges including rising research costs, lower drug approval rates, mounting regulatory pressures and increasingly complex reimbursement models. The need for specialist information is critical and the demand is growing. DRG's portfolio of products is widely regarded as the gold standard of information. We will leverage our long standing reputation and relationships with global pharma companies, our knowledge of emerging markets as well as our track record of successful acquisitions as we continue to grow further DRG's leadership position in the healthcare information and analytics industry."
According to Peter Hoenigsberg, chief executive officer (CEO), of Decision Resources Group, "This is an excellent opportunity for our business, customers and employees. Me ans my team are excited to be part of the Piramal Group and are confident that its expertise in acquiring, integrating and growing businesses will support our continued growth. Our customers have indicated that independent, objective, indispensable information from emerging markets is one of their greatest needs and Piramal's experience in emerging markets is important since these markets are the primary avenues for growth in the pharma industry."
Following the completion of the DRG acquisition, Piramal will operate DRG as a stand-alone business. The company will remain head-quartered in Burlington, MA and will continue to be led by Hoenigsberg and the existing senior management team. The transaction is expected to close by the June 30, 2012, subject to customary regulatory approvals and closing conditions.