Wang Jin: R & D outsourcing and restructuring is a feast for investors?

R & D outsourcing, improving efficiency and reducing cost, has always been the eternal theme of biomedical industry and innovative R & D it constantly promotes the vigorous development of cro service industry, also attracts venture capital, private equity (VC / PE) and investment institutions, as well as the linkage of primary and secondary capital markets This is because there are huge opportunities in this industry and different market segments have their own preferences With the fluctuation of market and performance, the globalization of pharmaceutical research and development, and the scale requirements of multi-national and multi center clinical trials, the reorganization and merger of this industry has brought unparalleled opportunities Quintiles international is the industry leader in R & D outsourcing cro Founded in 1982 and listed in 1997, it was privatized in 2003 at a cost of $1.7 billion Not only was it re listed in 2013, but also in 2016, it merged with Emmys IMS, a prescription drug market data giant, at 48.6 to 51.6%, becoming the world's largest cro company with a market value of US $18 billion Covince, the industry's second-largest, was acquired by labcorp for $6.2 billion and built into a $12 billion company The company has been considering acquiring other cros recently PPD, a drug R & D company founded in 1985, was privatized by two PE Institutions, Carlyle capital and Hellman & Friedman, for $3.9 billion at the end of 2011 Recently, it is said that the two private capitals are going to be sold at a price of 8.8-9 billion US dollars This month, Inc and Inventiv announced their intention to merge, with the former and the latter shareholders to form a 53% to 47% new company based on a stock swap Then, the Wall Street Journal revealed recently that parexel, the industry's third-largest player by performance but not by market value, will also be acquired by private equity funds at a price of $4 billion In recent years, the industry ranking of cro's major M & a trading companies market value (USD) time Amos, the world leader of Kuntai, 9 billion US dollars, 2016, second place of Coons Lab Corp 6.2 billion, Wuxi apptec first in China 2008 PPD Carlyle, Hellman 3.9 billion 1985 Enshi Inventiv 2017 JINGDING third sale 4 billion 2017? (produced by ihealth) so since the financial crisis, the news of M & A and restructuring of cro industry has almost never been broken, especially in the recent period, there are rumors of cro restructuring or sale almost every week Chiltern, Erich research and PPD are two recent cases of merger and reorganization Now, even JINGDING has been added to the list of merger and reorganization The cro has been sold, with a market capitalisation of about $3.8 billion, but a premium of more than $4 billion is expected, the report said JINGDING has 20000 employees around the world and its headquarters are located in the Boston area JINGDING's share price rose more than 7% on Monday, according to the news By Friday, it had risen more than 10% in a row Week up 5.3%, month up 27.5%, quarter up 20.7% According to the person, JINGDING has attracted a lot of interest from radical investors, including corvex Management LP, an investment company that has long established a position and owns a considerable stake in parexel JINGDING does not want to comment on the rumor Prior to that, JINGDING itself was also on the track of M & A in February this year, it acquired tmac, a contract medical service provider, which strengthened JINGDING's outsourcing of medical care expert services Although the financial terms of the M & a agreement were not disclosed, through the M & A, JINGDING obtained TMac and its outsourcing medical service business based on Georgia, and expanded to the biopharmaceutical and medical device industries JINGDING can be said to have great strength TA is the top five major player in cro industry, but there are also some problems in the growth process Last year, for example, INGO bank, its chief financial officer and senior vice president, resigned a few days before the fourth quarter results A few weeks later, the company delayed 10-K's filing and disclosure because internal audit found that employees "embezzled company funds." According to the company's 12b-25 document reported to the Securities Commission, it was found that one of the employees working in the "international business of the company" was obviously abusing the company's funds (JINGDING company headquarters In fact, as early as October 2015, JINGDING lowered its forecast for fiscal year 2016, reducing its revenue target by about 2% to US $2.14 billion, and also lowering its profit target for the year The company has been cutting about 850 jobs since 2016, with the goal of saving $20 million to $30 million in operating expenses from that year on In January this year, it also said it planned to cut more than 400 jobs to further cut costs Although this week, it outlined a detail that it planned to cut more jobs, 1100 to 1200 globally, because it was speculated that its goal was to "lose weight before marriage", reduce spending, improve financial indicators and be beneficial to the acquisition Covance, another industry leader, wanted to buy JINGDING for $671 million 18 years ago, but the deal failed By February 2015, Covance was himself acquired by labcorp for $6.1 billion However, the integration after the acquisition is not smooth and the performance is not ideal, and now it is also facing the pressure of cost reduction and staff reduction But labcorp did not give up It also wants to continue to acquire other cro companies The first target is ehnhi It is hard to say whether it can do so and consolidate its second place.