Sales process for Linden’s Advarra enters first round

  • Advarra formed via ’17 merger of Linden’s Chesapeake IRB and Northlane’s Schulman IRB
  • Sell-side advisers: Jefferies, Houlihan Lokey
  • Sources: Linden has express interest in reinvesting

Advarra, the Linden Capital– and Northlane Capital-backed provider of compliance services that help streamline the drug-development process, is up for sale, according to sources familiar with the matter.

First-round bids for the company came in well north of $1 billion, sources said. The initial bid date was May 23, they said.

The process for the Columbia, Maryland, company is expected to produce a mid- to high-teens multiple of the target’s just above $70 million in Ebitda, the sources said.

Jefferies and Houlihan Lokey are providing financial advice to the sellers, according to the sources.

Sources characterized the process as robust, with the buyer community compelled by the company’s technology-driven approach to pharma services and its strong free cash flow. The process includes predominantly sponsors, but a few strategics are in the mix, they said.

Linden has communicated to buyers an interest in reinvesting a minority stake in the company through Fund IV, the $1.5 billion pool through which it is currently investing, some of the sources said.

Advarra was created in November 2017 through the marriage of Linden’s Chesapeake IRB and Northlane’s Schulman IRB.

Chicago’s Linden invested in Chesapeake IRB in December 2015 through its third fund. Bethesda, Maryland-based Northlane, then operating as American Capital, invested in Schulman IRB in December 2014. Houlihan Lokey provide financial advice on both transactions.

Advarra provides independent institutional board, institutional biosafety committee and research quality and compliance consulting services in North America.

The company serves more than 3,000 pharmaceutical, biotech, medical-device and contract-research companies, as well as universities, academic medical centers and hospital systems.

Advarra in March acquired Seattle’s Quorum, bulking up its IRB services while also inheriting its Kinetiq technology-consulting division.

Longtime industry executive Pat Donnelly is CEO at Advarra. Donnelly most recently led Aptiv Solutions as chairman and CEO through its May 2014 sale to ICON.

Other notable players in the IRB industry include Arsenal Capital’s WCG, or WIRB-Copernicus Group.

The New York firm in August 2016 reinvested in WCG through Fund IV, recapitalizing the company alongside new investors including MSD Capital. Arsenal initially acquired the company, then called Copernicus Group IRB, in June 2012.

Representatives of Linden and Jefferies declined comment, while those with Houlihan and Advarra couldn’t immediately be reached.

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