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Advent in the lead to buy inVentiv for close to $4 billion: Reuters

(Reuters) — Private equity firm Advent International is in advanced talks to acquire inVentiv Group Holdings in a deal that could value the U.S. pharmaceutical research firm at close to $4 billion, including debt, people familiar with the matter said on Sunday.

The deal would underscore the private equity sector’s insatiable appetite for contract research organizations such as inVentiv, which have benefited in recent years from pharmaceutical companies’ drive to cut costs, reduce clinical trial times and expand their research and development presence around the world.

Advent has so far prevailed over rival buyout firm CVC Capital Partners in bidding for inVentiv, and is in the process of finalizing terms with its owner, private equity firm Thomas H. Lee Partners, the sources said.

While a deal could be announced as early this week, the sources cautioned it was possible for the negotiations to fall through at the last minute, in which case Thomas H. Lee would proceed with plans to launch an initial public offering of inVentiv in August.

The sources also asked not to be identified because the sale process is confidential. Advent and Thomas H. Lee declined to comment, while inVentiv and CVC did not immediately respond to requests for comment.

A deal for inVentiv would be the latest in a string of acquisitions of pharmaceutical contract research organizations by private equity firms over the past year, with Genstar Capital agreeing in March to sell ERT to Nordic Capital for $1.8 billion including debt.

BioClinica Inc, another U.S. contract research organization owned by buyout firm JLL Partners, is also exploring a sale that could value it at as much as $1.3 billion, Reuters reported in May.

Based in Burlington, Massachusetts, inVentiv works with life sciences companies to help them develop and market new types of drugs. It also has a consulting arm that advises pharmaceutical companies on everything from drug pricing to public relations.

Thomas H. Lee acquired inVentiv in 2010 for about $1.1 billion. Last year, InVentiv reported net revenue of $2 billion, up 10 percent from 2014. It had adjusted earnings before interest, taxes, depreciation and amortization of $281.1 million in 2015, an increase of 35.9 percent from 2014.

Reuters reported in March that inVentiv Health was working with Credit Suisse Group AG (CSGN.S) and Morgan Stanley (MS.N) on a potential IPO that could raise as much as $500 million.