PharmaNet Development Group, Inc., a leading provider of clinical development services, announced that it has signed a definitive merger agreement with affiliates of JLL Partners, Inc.
Under the terms of the merger agreement, JLL will commence a tender offer to purchase all of the outstanding shares of PharmaNet at a price of $5.00 per share in cash, representing a significant premium to PharmaNet's average closing price for the past thirty days.
The transaction values the company's common stock at approximately $100 million. The transaction will be financed by a $250 million equity commitment from JLL which includes the necessary funds to retire the $144 million principal amount of the Company's outstanding convertible notes. The transaction is subject to the valid tender of a majority of PharmaNet common stock, regulatory approvals and other customary conditions, but it is not subject to any financing conditions. The parties expect the tender offer to close by the end of the first quarter of 2009.
PharmaNet's board of directors has approved the definitive Merger Agreement and the transactions contemplated thereby and have resolved to recommend that PharmaNet stockholders tender their shares in connection with the tender offer contemplated by the definitive merger agreement.
"The board of directors and I are very pleased to have a partner in JLL that recognizes the substantial value we have built in the PharmaNet Development Group franchise," said Jeffrey P. McMullen, president and chief executive officer, PharmaNet Development Group, Inc. "We believe this transaction provides meaningful value to our stockholders while providing the solution to address the outstanding convertible notes."
"PharmaNet Development Group is well-positioned as a leading provider of outsourced clinical development services with a global infrastructure and an excellent reputation," said Ramsey Frank, managing director of JLL. "We look forward to working with the management team to enhance the company's growth prospects and expand its portfolio of services."
The merger agreement provides for JLL to acquire PharmaNet in a two-step transaction. The first step will consist of a cash tender offer for all outstanding shares of PharmaNet common stock at a price of $5.00 per share in cash. In the second step, the tender offer will be followed by a merger in which any untendered outstanding shares of PharmaNet common stock will be converted into the right to receive the same cash price per share paid in the tender offer.
UBS Investment Bank is acting as exclusive financial advisor to PharmaNet, and Morgan, Lewis & Bockius, LLP is acting as PharmaNet's legal counsel in the transaction. Latham & Watkins LLP is acting as legal counsel in the transaction to the PharmaNet board of directors.
Skadden, Arps, Slate, Meagher & Flom LLP is acting as JLL's legal counsel in the transaction.
PharmaNet Development Group, Inc., a global drug development services company, provides a comprehensive range of services to the pharmaceutical, biotechnology, generic drug and medical device industries. The company offers early and late stage consulting, phase I clinical studies and bioanalytical analyses, and phase II, III and IV clinical development programmes.
JLL Partners is a New York-based leading private equity investment firm with $4.0 billion of capital under management. JLL's investment philosophy is to partner with outstanding management teams and invest with them in companies that can continue to grow. JLL has invested in a variety of industries with a special focus on healthcare services and financial services.