ICON (ICLR) To Buy PRA Health Sciences (PRAH) In $12 Billion Deal

By Amit Chowdhry ● February 25, 2021
  • ICON plc, (NASDAQ: ICLR) recently announced it entered into a definitive agreement to acquire PRA Health Sciences, Inc. (NASDAQ: PRAH) in a deal valued at $12 billion. These are the details.

ICON plc, (NASDAQ: ICLR) — a global provider of outsourced drug and device development and commercialization services to the pharmaceutical, biotechnology, and medical device industries, and government and public health organizations — announced it has entered into a definitive agreement to acquire PRA Health Sciences, Inc. (NASDAQ: PRAH) in a cash and stock transaction valued at approximately $12 billion with the per-share merger consideration consisting of $80 in cash and 0.4125 shares of ICON stock. This consideration represents an approximately 30% premium to PRA’s closing price as of February 23rd, 2021.

This deal brings together two innovative and growing organizations with similar cultures and a shared focus on high quality and efficient clinical trial execution from Phase 1 to post-approval studies. And biopharma and medical device customers of all sizes will benefit from broader service offerings and geographic footprint, deeper therapeutic expertise, expansive healthcare technology innovation, and functional talent and capabilities.

PRA’s mobile and connected health platforms and real-world data and information solutions together with ICON’s Accellacare site network, home health services, and wearables expertise, will be combined to deliver differentiated decentralized and hybrid trial solutions to meet growing customer needs.

The deal is anticipated to be highly accretive delivering double-digit accretion in the first full year and growing to 20%+ thereafter, driven by growth momentum, estimated annual run-rate cost synergies of $150 million, and the combined effective tax rate decreasing to 14%, both to be realized in approximately 4 years.

Under the terms of the deal, PRA shareholders will receive per share $80 in cash and 0.4125 shares of ICON stock. And upon completion of the transaction, PRA shareholders will own approximately 34 percent of the shares of the combined company and ICON shareholders will own approximately 66%.

The combined company will be headquartered in Dublin, Ireland. And Dr. Steve Cutler, Chief Executive Officer of ICON plc, will serve as Chief Executive Officer of the combined company and Brendan Brennan, Chief Financial Officer of ICON plc, will serve as Chief Financial Officer. Ciaran Murray will serve as the Chairman of the Board of Directors. Current PRA Chairman and Chief Executive Officer Colin Shannon will join the board post the closing of the transaction along with one additional board member from PRA.

ICON plans to fund the cash portion of the transaction consideration through a combination of cash on hand and fully committed debt financing from Citi. The deal is not subject to a financing condition. And the transaction has been unanimously approved by both Boards of Directors and is anticipated to close during quarter three of 2021, subject to regulatory and shareholder approvals and customary closing conditions. Until closing, PRA and ICON remain separate and independent companies.

KEY QUOTES:

“The combined company will create a new paradigm for accelerating clinical research and bringing new medicines and devices to market. Both ICON and PRA have track records of robust growth and performance and we are ready to build on this unrivaled position of strength, utilizing the outstanding talent in both organizations. With broader and deeper operational scale combined with innovative technology and real-world data solutions, we will enable all customers to reduce their development time and cost. We will be the leading provider of decentralized and hybrid trial solutions through the integration of our data capabilities, health platforms, and Accellacare site network. The transaction will be highly accretive from full-year 1 post-close.”

— Dr. Steve Cutler, Chief Executive Officer, ICON plc

“I joined PRA 13 years ago to help build a company that would make a difference in the world and transform the way we developed new medicines. The way we do it now takes far too long and costs far too much. Critically ill patients can’t wait for cures. Underserved populations can’t wait for access. Every day counts. COVID-19 created a platform for change that we cannot ignore. The pandemic accelerated the adoption of mobile health technologies and healthcare intelligence tools – tools that PRA helped develop – at an unprecedented rate. The union of PRA and ICON will create an organization that has the people, data, and technology to bring those cures to patients faster and more efficiently than ever before. We are thrilled to be joining with ICON, a company with a similar culture and values. I’m deeply indebted to PRA’s 19,000 talented employees who have helped us bring this vision closer to reality. We stand together now because patients can’t wait.”

— Colin Shannon, Chairman and Chief Executive Officer, PRA Health Sciences