Trinity Hunt eyes consolidation with Centricity Research investment

The firm also plans on acquiring add-ons in partnership with Centricity Research.

The clinical research industry is highly fragmented and is in an early phase of consolidation, John Oakes, principal at Trinity Hunt Partners, told PE Hub.

That’s a reason why Trinity Hunt Partners recently made a majority investment in Centricity Research, a Columbus, Georgia-, and Toronto-based clinical research services provider. The deal makes Trinity Hunt a majority stakeholder in the company.

The firm plans on acquiring similar businesses in partnership with Centricity Research as add-ons.

John Oakes, Trinity Hunt Partners

Demand has grown partially because the clinical research industry is a fairly recession-resistant space, which makes it an attractive category to invest in. Another factor was covid, which placed a spotlight on the clinical trial industry.

Oakes said several of the other trials that were focused on other therapeutic areas hit the pause button as there was a sense of urgency in developing a vaccine or effective treatments for covid.

“It exposed that need for more players of scale that have more resources, better technology, etc in the space,” he added.

A deal in the making

Formed in 2021 through the integration of multiple clinical research businesses across North America, Centricity Research has completed more than 2,500 studies and has over 100 FDA and Health Canada drug approvals.

Oakes said Trinity Hunt was first introduced to Centricity Research last fall through proactive outreach. It led to a letter of intent signed late last year. Centricity is Trinity Hunt’s eighth investment in Fund VI, a $460 million investment fund raised in 2021.

The fund prioritizes partnering with small-cap companies in business, healthcare and consumer services subsectors, where there is an opportunity to drive transformational growth.

“The approach was we thought pharma services was an interesting area,” Oakes said. “Specifically within pharma services, clinical research was a very interesting theme for us as a firm to go and invest in for a lot of reasons. There are great tailwinds in the broader pharma services space as far as research and development.”

Oakes added that with the increasing complexity of clinical trials, companies that are consolidated, operate at scale or have better resources should be well suited to thrive long-term in the space.

There are several benefits to consolidation in the clinical research space as well. Sponsors and CROs prefer to work with companies at scale that have more data capabilities, numerous sites and good patient diversity metrics.

“If you’re a sponsor or CRO in this space, you can go to a company like Centricity, and they can enroll a larger number of patients across a greater number of sites with a diverse patient population,” he added. “Those large pharma sponsors or CROs would much prefer to do that versus going to a smaller clinical site business that can only enroll 20 patients instead of 200 patients.”

Potential investment synergy

The investment in Centricity Research is Trinity Hunt’s first in clinical research. Adding to its portfolio, the company has explored adjacent areas. The firm recently made a majority investment in Supreme Optimization, a San Juan, Puerto Rico-based digital marketing agency that exclusively focuses on the pharma and life sciences industry.

Trinity Hunt also has made majority investments in several physician practice management businesses that could potentially complement Centricity Research.

This includes Parallel ENT & Allergy, a physician-centric management services organization based in McKinney, Texas; Unity MSK, a Los Angeles-based musculoskeletal practice management platform; Centrata Pain Partners, a Lone Tree, Colorado-based interventional pain management provider; and MainStreet Family Urgent Care, an urgent care business headquartered in Birmingham, Alabama.

“We have a lot of physicians from each one of those investments that are very interested in doing clinical research, but they don’t really know how to set up and run a clinical research operation within their larger physician practices,” Oakes said. “There may be some synergies between Centricity and those other investments that are in our healthcare services portfolio over time.”