MTS Health-backed early-phase CRO heads to market

MTS Health Investors is exploring the sale of Celerion less than three years after investing in the Phase 1-focused contract research organization, according to three sources familiar with the matter.

The healthcare private equity firm has retained Lazard to advise on a process, the sources said.

Lazard knows Celerion well, having conducted the process that led to its October 2014 recapitalization by New York’s MTS Health. The provider of early-phase drug-development services is said to have traded for a multiple of EBITDA between 8x and 8.5x at the time, one of the sources said.

Celerion, Lincoln, Nebraska, provides Phase 1 clinical-development services to biotech and pharma companies. Led by CEO Susan Thornton, its services include clinical study conduct, data management and biometrics, PK/PD analysis, bioanalytical services, medical writing and regulatory and drug-development-program management.

Celerion is said to be generating north of $20 million in EBITDA, one source said.

While large CROs have proven highly acquisitive, most have strayed from Phase 1 services. Industry giants like Quintiles IMS do encompass Phase 1-related offerings but focus primarily on supporting life-science companies during important late-phase clinical trials.

At the same time, Celerion is viewed as more of a pure-play Phase 1 provider compared with PE-backed peers including Altasciences Clinical Research and Quotient Clinical.

Quotient Clinical encompasses services tailored to Phase 1 drug development as well as clinical-trial-supplies manufacturing. Altasciences’ services have expanded beyond generic drugs, with offerings that support the development of innovator — or brand-name — drugs. These ancillary services have positioned each as more appealing assets, one source noted.

In fact, the process for Celerion comes less than six weeks after Altasciences secured a new PE backer.

Audax Private Equity on June 13 surfaced as the winning suitor in the Fairmount Partners-run auction for Altasciences. The deal marked an exit for Toronto sponsor Kilmer Capital, which took its initial majority stake in Algorithme Pharma in 2007.

The U.K.’s Quotient Clinical, meanwhile, was scooped up in December 2015 by Dennis GillingsGHO Capital Partners. Gillings, founder and chairman of Quintiles, co-founded GHO in 2014 alongside Mike Mortimer and Mireille Gillings.

An MTS representative declined comment, while those with Lazard and Celerion didn’t immediately return requests for comment.

Action Item: Reach out to Curtis Lane, senior managing director at MTS Health, at

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