ECI agrees first AIM take-private of 2008

The UK mid-market firm secures its third deal since the credit crisis engulfed the buyout industry, taking its deals' total enterprise value to £250 million.

ECI Partners, a UK mid-market buyout specialist, and the independent directors of Premier Research Group, a contract research business, have agreed an offer for the AIM-listed company for £1 a share in cash, valuing it at approximately £60 million ($118.8 million; €76.9 million). 

Deals are very doable.

Richard Chapman, ECI partner

The offer is a premium of approximately 38 percent to the closing price of 72.25 pence on 14 March, the last business day before the announcement the company was agreeing an offer, or 50 percent above the volume weighted average price for the 3 months before 18 March.

Premier Research Group provides a comprehensive range of clinical services, including the design and execution of clinical trials, to the pharmaceutical, biotechnology and medical device industries. 

Richard Chapman said the sector was growing at 10 percent per annum, giving ECI the confidence to take the company private. He said: “It originally floated with the aim of doing a buy and build, but the current state of the stock market and the availability of debt meant it either had to pursue a new strategy or go private.”

He said ECI likes buy and build deals and its ability to tap the debt market meant the management team

Leveraging labs

could pursue its original plan. The business is raising £40 million from three banks: Lloyds TSB, Barclays and WestLB. Chapman said: “It is harder raising debt because you are dealing with three banks. It is more time-consuming. I have someone on the team dealing full time with the banks. In the past that has been a part-time role.”

ECI intends to back the company, which has approximately 850 employees, in its expansion.  It already has 17 operating facilities throughout Western, Central and Eastern Europe and 11 in the US.

ECI will also provide additional investment capital for appropriate opportunities. Chapman said: “We are very much open for business. This takes the total enterprise value of our deals since the credit crisis to £250 million. Deals are very doable, but it takes more time.”

The acquisition of Premier Research will be made through a scheme of arrangement and should complete towards the end of May. The proposal is subject to the sanction of the court and the approval of shareholders.