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Apr 28, 2011

Private Equity Firm Nautic to Purchase Omnicare Clinical Research

  • Private equity firm Nautic Partners is buying the contract research organization Omnicare Clinical Research (Omnicare CR). The deal that will officially separate it from its former parent company, publicly traded Omnicare. Omnicare CR serves biotechnology, nutraceutical, medical devices, and diagnostic industries in 32 countries worldwide through its five business units: early phase, phase II/III, late phase, medical device, and pharmaceutics.

    In a statement of its first quarter 2011 revenues released separately from the Nautic acquisition announcement, Omnicare said it committed to selling off Omnicare CR during Q1 because it was “no longer a good strategic fit with the company’s portfolio of assets.”

    In its 2010 annual report, Omnicare said its CRO Services segment has among its customers “many of the major multinational pharmaceutical and biotechnology companies as well as smaller companies in the pharmaceutical, biotechnology, nutraceutical, and medical devices industries.” No one customer accounted for more than 10% of consolidated revenues last year, according to Omnicare.

    Due largely to a $91 million goodwill impairment charge following a revised outlook on the business during the third quarter of 2010, Omnicare recorded an operating loss of $109.875 million for the CRO Services segment last year, on net sales of $109.176 million. That compares with a $3.578 million operating loss on $156.7 million of net sales in 2009, according to the annual report.

    The company attributed the impairment charge to “adverse conditions in the CRO market leading to lower-than-anticipated levels of new business being added, as well as early project terminations by clients and client-driven delays in the commencement of certain projects.”

    Omnicare CR is Nautic’s latest healthcare addition to a diversified portfolio that includes the specialized diagnostic laboratory Diagnostics Security Holder; Reliant Hospital Partners, the operator of inpatient rehabilitation hospitals; and HPS Holding Company, a provider of payment and reimbursement solutions to hospitals and other healthcare systems.

    Founded in 1986, Nautic Partners is a middle-market private equity firm with more than $2.5 billion of equity capital under management. "Nautic will fully support Omnicare CR on a strategic level and with additional capital for growth. We have complete confidence that with our added support, company leadership will maximize efforts around the great work that has already being done, adding to Omnicare CR's profitability," says Chris Crosby, Nautic’s managing director.


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