CCMP books 3x on exit to Cinven

The divestment of Medpace has netted CCMP a 48% IRR.

CCMP Capital Advisors will sell healthcare contract research organisation Medpace to Cinven for $915 million, according to a statement.

CCMP declined to disclose a return multiple for the deal, but a source close to the situation said the exit generates a 3x return and 48 percent IRR for the firm. 

Ohio-headquartered Medpace provides management services to the R&D departments of pharma, biotech and medical device clients and has expertise in therapeutic areas including cardiovascular and oncology. The company, which was set up in 1992, has about 1,500 staff and operates in more than 45 countries. Last year, its adjusted EBITDA was $94 million. 

Cinven declined to comment beyond the statement, but it is understood the firm bought the 80 percent stake after taking part in an auction, during which it fought off competition from other GPs including Summit Partners and GTCR. The deal consists of approximately 45 percent equity and 55 percent debt, according to a financing source. 

Cinven aims to further internationalise the business, “with growth in Europe and Asia presenting a real opportunity for the business”, the firm said.

“The CRO industry consolidation has created a gap in the market serving the mid-cap pharma and smaller biotech players – where Medpace operates and where we intend to capitalise on organic growth opportunities,” Supraj Rajagopalan, a partner at Cinven, added.

The deal is the seventh from Cinven’s Fifth European Buyout Fund, a €5.3 billion vehicle that closed in June last year. The firm hit its €5 billion target in March but extended its fundraising by a few months to admit several investors who were unable to complete their commitments earlier.

Last August, Cinven agreed to buy a majority stake in Heidelberger Leben, a specialist provider of retirement and life insurance products in Germany. In July, it backed Host Europe Group, a European provider of hosting and domain services to SMEs, for £438 million. A month prior to that, Cinven acquired CeramTec, a global manufacturer of ceramics for the medical and automotive industry for €1.49 billion. The acquisitions of Pronet, a provider of security electronic alarm systems in Turkey, Prezioso, a provider of coating and insulation services business, and Amdipharm Mercury Company (AMCo) also came from Fund V. 

The sale of Medpace comes as CCMP is aiming to wrap up fundraising for its CCMP Capital Advisors III. The firm came to market in June 2012 targeting $3.5 billion for the fund. It held a first close at $1.12 billion in July and had raised $1.7 billion by October 2013, according to Private Equity InternationaI’s Research and Analytics division. 

CCMP Capital Advisors specialises in mid-market buyouts and growth equity investments of $100 million to $500 million in North America and Europe. CCMP invests in four primary industries: consumer, industrial, energy and healthcare, according to its website.