Odyssey shakes hands on $500m-plus deal for Linden’s ProPharma Group

Odyssey previously weighed buying ProPharma through existing portfolio company TrialCard, three sources said.

Odyssey Investment Partners is buying ProPharma Group from Linden Capital Partners in a deal valuing the compliance-related pharma services company north of $500 million, according to people familiar with the matter. 

ProPharma’s existing management team, including CEO Dawn Sherman, will continue to run the company, investing in the deal alongside Odyssey.

The deal provides an exit for Chicago-based healthcare specialist Linden, whose investment in the company dates to October 2016. 

The transaction concludes a sale process conducted by Centerview Partners and William Blair, with a process having restarted in June after the global pandemic put a halt to activity earlier this year, PE Hub previously wrote.    

The Overland Park, Kansas, company expects to produce more than $40 million in 2020 EBITDA, accounting for small covid-19 adjustments, sources said at that time. 

Other participants in the process included European private equity shop CapVest Partners, Chicago’s Waud Capital, as well as one large strategic bidder, sources said. 

While the outcome of the process has resulted in a new platform investment for Odyssey, the middle-market private equity firm previously weighed buying ProPharma through existing portfolio company TrialCard, three of the people said. 

Odyssey in November 2017 bought TrialCard, which offers product access, medication adherence, and patient support services to pharmaceutical companies. 

Odyssey, with offices in New York and Los Angeles, declined to comment on financial terms or specifics of the process; however, Jeffrey McKibben, a senior managing principal of Odyssey, said: “ProPharma represents a compelling opportunity to invest in a growing business with attractive demand characteristics given its critical role in helping customers comply with regulatory and safety requirements. Dawn and the management team have done an outstanding job of establishing a comprehensive offering of services in a large, growing and fragmented industry.” 

Odyssey turned to Jefferies for financial advice, while Latham & Watkins and Smith Anderson provided counsel. 

Founded in 2001, ProPharma’s offerings include life-science consulting services to ensure quality and regulatory requirements are met, as well as services for medical information and regulatory affairs. The company also provides pharmaco-vigilance, or services that ensure drug safety during clinical trials and post-marketing.

ProPharma operates across five US-based offices and 10 additional offices across Canada, UK, Netherlands, Sweden, Germany, Japan and Australia.

Linden exits

For Linden, ProPharma marks its second exit through the pandemic. Less than two years into its investment, the firm in May clinched a deal to sell Solara to publicly-traded AdaptHealth. Adapt paid $425 million in cash for the provider of continuous glucose monitors, positioning Linden to make more than 3x its money and generate a more than 100 percent IRR on Solara, a source told PE Hub at the time. 

On the pharma services front, Linden last year made out well on its majority stake sale of Advarra, a provider of institutional review board and other compliance-related services for clinical research.

Genstar Capital in June 2019 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.

The deal comes as another high-profile pharma services process approaches a conclusion. 

PE Hub wrote yesterday that Blackstone Group is approaching a $2.4 billion deal for Precision Medical Group that would leave existing investors Berkshire Partners and TPG Growth with minority investments in the company.

Linden, Waud and CapVest declined to comment. Spokespersons Centerview and William Blair didn’t immediately return requests for comment. 

Action Item: Check out Odyssey’s latest form ADV.