Avista picks up INC Research for $600m

The Ontario Teachers’ Pension Plan will team up with Avista Capital for the secondary buyout of INC Research.

The Ontario Teachers’ Pension Plan, through its private equity arm Teachers’ Private Capital, will join forces with Avista Capital Partners in taking control of US-based INC Research, a clinical research organization.

The financial details were not disclosed, but a source familiar with the deal confirmed the transaction was valued at slightly under $600 million.

Growth in the global healthcare sector continues to be strong as the world's population ages and emerging markets gain more disposable income.

David Burgstahler

The duo will acquire the research organization from an investor group led by US-based private equity firms Crosspoint Venture Partners and Adams Street Partners, with INC Research’s existing management staying in place.

The deal, which is expected to close in the fourth quarter of 2010, will be financed with both equity and debt, with the pension group and Avista sharing an even split in equity.

Avista declined to name any banks financing the deal, but stated equity capital will be deployed from its Avista Capital Partners II fund, which is now over 60 percent committed.

New York investment bank Jefferies & Company acted as financial advisor to INC Research and DLA Piper served as legal counsel. Weil, Gotshal & Manges served as legal counsel for Avista.

The deal comes amid a number of high-profile private equity transactions in the healthcare

Healthcare sector: private equity
firms do constant check-ups on
attractive  deals in the industry.

industry. “Growth in the global healthcare sector continues to be strong as the world’s population ages and emerging markets gain more disposable income,” said Avista partner and president, David Burgstahler, in an interview with PEO. 

Other recent healthcare deals include PG Capital and The Carlyle Group’s July delisting of Australian hospital chain Healthscope for $2.34 billion.

Earlier this week private equity firm Leonard Green & Partners agreed to a $363 million buyout of US hospital manager Prospect Medical Holdings, which included $158 million in debt.