(Reuters) — Private equity firm EQT is nearing a deal to acquire U.S. drug development consultancy Certara for around $850 million, including debt, from Arsenal Capital Partners, another buyout firm, people familiar with the matter said on Tuesday.
The deal would mark EQT’s second major investment in the U.S. healthcare sector, and highlight the continued appetite for companies that help drugmakers with their research and development processes.
The negotiations are advanced and a deal could be announced as soon as this week, the people said, asking not to be identified because the discussions are confidential.
EQT and Certara declined to comment. Arsenal did not immediately respond to a request for comment.
Princeton, New Jersey-based Certara provides technology and consulting services aimed at helping pharmaceutical companies obtain approval for their treatments.
It offers a novel technology that allows drugmakers to model the performance of drugs, in some cases reducing the need for costly and potentially dangerous clinical testing.
Certara also operates a consulting arm aimed at assisting drug makers with submissions to regulators.
There has been a flurry of private equity investments in the pharmaceutical services sector in recent years, as the sector benefits from pharmaceutical companies’ drive to cut costs, reduce clinical trial times and expand their research and development presence around the world.
Recent deals include INC Research Holdings Inc‘s $7.4 billion merger with inVentiv Health Holdings and Quintiles Transnational Holdings Inc‘s $17.6 billion merger with IMS Health Holdings Inc.
Last year, Stockholm, Sweden-based EQT made its first major U.S. healthcare investment, buying Press Ganey Holdings Inc, a provider of patient satisfaction surveys, for around $2.35 billion.
EQT has made more than $8 billion in healthcare investments in the past three years, including in companies such as prosthetics maker Ottobock and Sivantos Group, one of the world’s leading manufacturers of hearing aids.