Life Sciences IT M&A Is Heating Up

On April 30, 2013, Parexel Internationl Corp. (Nasdaq:PRXL) announced that it will acquire Heron Group Ltd., a life sciences consultancy which provides commercialization services for biopharmaceutical companies.  Parexel is paying $38.2 million for the business, $14 million of which is in the form or an earnout over the next 26 months. This transaction highlights a trend we are seeing for M&A in the Life Sciences sector. 

Late last year, Navigant acquired Easton Associates, LLC a boutique strategy consulting firm focused on the pharmaceutical sector and earlier this year LLR Partners invested in HighPoint a Pharmaceutical focused IT Consulting firm.  Life Sciences has not received the same level of attention that the Healthcare provider market has with its notable acquisitions including SAIC’s acquisition of MaxIT last year for almost $500 million and RLH’s recent acquisition of Chartis, a healthcare strategy consulting firm.

While we believe activity in the Healthcare market will continue to accelerate we believe that 2013 may be the year for Life Sciences to make its mark.  The public markets for Life Sciences companies is also active. ModelN, a revenue management software provider had a very successful IPO last month and Quintiles just recently priced its IPO.

We are seeing heightened activity in the Life Sciences market across our areas of focus including IT, Business Consulting, Software and Data.  Consequently, we expect a number of M&A deals to be announced in the coming months for services, software and data providers serving this dynamic market.