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Biopharma Services Industry Update H1 2024

Read more about M&A activity and trends in this sector

U.S. Biopharma Services Industry Update – 1H 2024

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M&A Market Update

  • In 1H 2024, biopharma services M&A activity rebounded compared to 1H 2023, and inched closer to the record highs observed in 1H 2022 and 1H 2021. The sector recorded 78 deals and the highest deal value ($18.5 BB) from the same period in the last 5 years. However, this deal value figure was largely driven by Novo Holdings' acquisition of Catalent for $16.5 BB.
  • In Feb-24, Novo Holdings announced the acquisition of Catalent, a global CDMO operating through a network 50+ sites. Novo agreed to acquire Catalent for total consideration of $16.5 BB, valuing the business at 4.0x revenue and 42.5x EBITDA. The purchase price represents a 47.5% premium to the 60-day average share price. The transaction is expected to close towards the end of 2024. This acquisition will be used by Novo to meet the manufacturing needs related to the increased demand for its GLP-1 based diabetes and obesity treatments.
  • Other strategic deals include Eli Lilly’s acquisition of Aparito, a company focused on digitalizing clinical trials and collecting real world evidence (RWE), and Frontage Labs acquisition of Accelera’s Bioanalytical and DMPK Businesses.
  • Financial sponsors were also active during 1H 2024, with 56 transactions inked. In Apr-24. CoreRx (backed by QHP Capital) acquired Societal CDMO (small molecule contract manufacturer) for a total consideration of $165.7 MM, valuing the business at 1.8x revenue and 23.3x EBITDA.
  • In Jun-24, Fortrea completed the divestiture of its Endpoint Clinical and Patient Access businesses to Arsenal Capital Partners for total consideration of $345.0 MM, valuing the deal at 1.4x revenue and 11.5x EBITDA. By divesting these two businesses, Fortrea will now be able to focus on organic growth as a pure-play CRO.
  • Also in Jun-24, Pinnacle Clinical Research (backed by LongueVue Capital), acquired 5 clinical research sites in 3 states across the US. This acquisition will take Pinnacle’s total network to 12 sites and will expand its therapeutic area expertise into Central Nervous System (CNS) indications with a focus on Alzheimer’s Disease.

Footnote

Notes: Data as of June 30, 2024

1. EBITDA multiples greater than 30.0x are considered as “NM” and exclude clinical trial software and other health IT-focused transactions

2. Includes add-on deals

Sources: Press releases, Capital IQ, MergerMarket, and PitchBook

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U.S. Biopharma Services Industry Update – 1H 2024

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