Linden’s Propharma Group preps for auction

The anticipated auction follows the Chicago buyout shop’s majority exit of Advarra, which commanded a $1.3 bln valuation.

Healthcare specialist Linden Capital is gearing up to bring pharma services company ProPharma Group to market, three people familiar with the matter told PE Hub.

Centerview Partners and William Blair have been engaged for financial advice, some of the people said.

A formal process has yet to launch, the sources said; however, one of the people said introductory meetings are taking place this week during the J.P. Morgan Healthcare Conference in San Francisco.

The process is expected to encompass both sponsors and strategic buyers, two of the sources said. PE platforms such as Leonard Green & Partners’ WIRB-Copernicus Group or Genstar Capital- and Linden-backed Advarra could emerge as contenders, one of the people speculated.

ProPharma, which provides various compliance-related services to the life sciences industry, expects to produce more than $40 million in 2020 Ebitda, another source said.

Headquartered in Overland Park, Kansas, ProPharma’s operations span 16 locations across North America, Europe, Australia and Asia.

The company’s offerings include life science consulting services to ensure quality and regulatory requirements are met, medical information services, regulatory affairs services and pharmacovigilance, or services that ensure drug safety during clinical trials and post-marketing.

Led by longtime healthcare executive CEO Dawn Sherman, ProPharma has fueled growth in part through M&A. Its 2019 purchases included the U.K.’s Southwood Research and The Weinberg Group, of Washington, D.C.

Linden, a Chicago-headquartered private equity firm that invests exclusively in the healthcare sector, invested in ProPharma in October 2016 out Fund III.

The outsourced pharma services segment in which ProPharma plays has been a highly sought after vertical of healthcare investment in recent years, with recent assets commanding Ebitda multiples in the mid-teens to 20x zip code.

Linden is among firms that have proven successful in the space, making out well on its recent majority stake sale of Advarra, a provider of institutional review board and other compliance-related services for clinical research.

Genstar Capital in June agreed to buy Advarra in a deal valued at approximately $1.3 billion, or about 18x Ebitda, sources told PE Hub at the time. Linden remained a minority investor, injecting new capital via Fund IV.

Leonard Green subsequently bought Advarra peer WIRB-Copernicus Group in a deal valued between $3.5 billion and $4 billion, equating to a 2019 Ebitda multiple of approximately 20x, PE Hub reported.

Elsewhere, Astorg in October joined eResearchTechnology’s existing investor base in a transaction valuing the fast-growing clinical trial technology company at approximately $3.8 billion, or around 18x Ebitda, PE Hub reported.

Linden declined to comment. Centerview and William Blair did not return requests for comment. ProPharma could not immediately be reached.

Action Item: Check out Linden’s latest Form ADV: