PAREXEL Announces Acquisition By Pamplona Capital For $5B

PAREXEL International Corporation (NASDAQ:PRXL) , a global biopharmaceutical services company and provider of clinical research and logistics, recently announced that it has agreed to be acquired by Pamplona Capital Management, LLP. The transaction is valued at approximately $5 billion, including assumption of PAREXEL's net debt by Pamplona.

Stock Performance

The price performance of PAREXEL International was favorable in the last three months. The stock gained 40.39%, outperforming the Zacks classified Medical Services sub-industry’s gain of almost 9.28%. The current level compares favorably with the S&P 500’s return of 5.16% over the same time frame.

The estimate revision trend for the current year was favorable in the last two months. Two estimates moved south against six movements in the opposite direction.

Pamplona will acquire all outstanding shares of PAREXEL for $88.10 per share in cash, per the agreement. This along with the assumption of PAREXEL's net debt by Pamplona takes the total amount of the transaction to approximately $5 billion.

PAREXEL’s Board of Directors unanimously approved the deal. The transaction is expected to close early in the fourth quarter of 2017. However, the approval from the company’s shareholders regarding the deal is pending. Upon completion of the deal PAREXEL will become a privately held company.

Headquartered near Boston, MA, PAREXEL is a leading global biopharmaceutical services company. The company provides a broad range of clinical research, consulting, medical communications, and technology solutions and services to the worldwide pharmaceutical, biotechnology and medical device industries. The company has offices in 86 locations in 51 countries and has approximately 19,600 employees.

Going forward, we believe that PAREXEL is focused on diversifying its core business through launches like branded data-driven services, Connected Journey. In fact, the company is striving to come up with a single solution for all the clinical development outsourcing needs of clients by unifying the highly advanced tasks of clinical monitoring, data management, biostatistics, site monitoring, study management, medical writing and pharma covigilance.
Meanwhile, the biopharmaceuticals market is forecast to reach a worth of $278 billion by 2020 at a CAGR of 9.4%, per Persistence Market Research. We expect PAREXEL to gain significant traction in the biopharmaceutical and related ancillary markets, courtesy of the favorable trend and the takeover.

Zacks Rank & Key Picks

Currently, PAREXEL carries a Zacks Rank #3 (Hold).

Some better-ranked medical stocks are Align Technology, Inc. (NASDAQ:ALGN) , Inogen, Inc. (NASDAQ:INGN) and Accelerate Diagnostics, Inc. (NASDAQ:AXDX) . Both Align Technology and Inogen sport a Zacks Rank #1 (Strong Buy), while Accelerate Diagnostics carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Align Technology has an expected long-term adjusted earnings growth of almost 24.1%. The stock has added roughly 21% in the last three months.

Inogen has a long-term expected earnings growth rate of 17.5%. The stock has a solid one-year return of around 96%.

Accelerate Diagnostics has an expected long-term adjusted earnings growth of 30%. The stock has added roughly 17% in the last three months.

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