A sale process is underway for Velocity Clinical Research, an organization with 14 research sites that has experienced booming business as a result of coronavirus-related vaccine and treatment studies, according to five people with knowledge of the process.
Harris Williams is providing sell-side financial advice on the sale process, the people said. First round bids were fielded at the start of the week for the Durham, North Carolina, company founded just over three years ago, two of the people said.
Velocity, backed by private equity firm NaviMed Capital, of Rosslyn, Virginia, has recruited nearly 10,000 patients for covid-19 studies in total – accelerating business growth tremendously over the last several months, a source familiar with the company said.
Staff has doubled to 500 as has its site space, with Velocity now leasing bigger spaces – doubling the number of exam rooms, the person said. Revenue is also expected to double based upon the budget this year, the source added.
Velocity is marketing $50 million in projected 2021 EBITDA, however a $30 million EBITDA figure accounting for “one-time benefits” has also been cited, three of the sources said.
Valuing Velocity is poised to prove a challenging task given how rapidly the company has grown through the pandemic, sources said. Private equity firms participating in the process are examining the extent to which covid-related work is long-standing versus poised to drop off – assessing what an normalized EBITDA figure would look like, they said.
Founded in 2017, Velocity has 14 research sites across 10 states, according to its website. The organization states that it has completed 4,600 trials to date across therapeutic areas including dermatology, endocrinology, gastroenterology, neurology, respiratory and vaccine.
The company has been acquisitive since its inception in late 2017. It most recently bought eStudySite in November, adding two new sites in San Diego currently enrolling patients for both covid-19 treatment and covid-19 vaccine trials, an announcement said.
A July media report said that Velocity at that time was the only company to be involved in all active Stage 3 coronavirus studies announced in the United States.
Velocity is led by Dr. G Paul Evans, a longtime industry executive. Evans’ former leadership positions include roles at PAREXEL, IQIVIA and Synexus, the latter which he co-founded. The company was founded by executive chairman Bruce Tomason, the former CEO of Copernicus, Alterna and One Call Medical.
The process comes as private equity investors continue to flock to pharma services opportunities across the spectrum. The sector is only seeing greater demand amid the pandemic, with many industry tailwinds accelerating including a big push to make R&D spending more efficient.
In recent activity, Novo Holdings earlier this week announced its acquisition of Altasciences, a mid-size contract research organization for pharmaceutical and biotechnology companies, providing an exit for Audax Private Equity.
Elsewhere, Riverside Co is preparing to put Greenphire on the block this spring, with the niche clinical trial payments technology business anticipated to field significant interest from a range of buyers, PE Hub wrote in January.
Velocity and NaviMed declined to comment. Harris Williams did not return requests for comment.