Summary

Other Scenarios:

Buyer: inVentiv Health Inc. (VTIV) Last Price: 42.87 Market Cap.: 1.38B
Target: Penwest Pharmaceuticals (PPCO) Last Price: 8.55 Market Cap.: 200.03M

Lines of Business Summary:

Product Summary:

Overlap & Complementary Sectors

Sector Buyer Target # of Focused Companies
Business and Public Services   648
Business Services   213
Healthcare 931
Biopharmaceuticals   377
Healthcare Services   153
Outsourced Services 69

- Focused. Denotes that the company is considered focused in this area. In general, Focused Companies draw the majority of their earnings in the sector/product area specified.

- Sector Pure-Plays. Denotes that the company is focused in the selected sector and generates nearly all earnings in the sector/product area specified.

- Sector Participation. Denotes that the company develops products in this line of business.

Sample Products in Similar Lines of Business

Sample Products in Complementary Lines of Business
Buyer (Total: 21)
  • Synergos, Inc.
  • HHI Clinical & Statistical Research Services
  • PromoTech Research Associates, Inc.
  • JSAI
Target (Total: 12)
  • SyncroDose
  • Geminex
  • TIMERx
  • Gastroretentive Drug Delivery System
Buyer
  • Addison Whitney
  • MedConference
  • inVentiv Patient Outcomes The Franklin Group
  • inVentiv Patient Outcomes AWAC
Target
  • Nifedipine XL
  • PW2132 (Torsemide ER)
  • PW4110
  • PW4153

Business Relationship Summary:

Top Key Suppliers

Top Key Customers
Buyer (Total: 0)

n/a
Target (Total: 2)
  • Mylan Inc. (MYL)
  • DRAXIS Health Inc. (USA) (DRAX)
Buyer (Total: 10)
  • Johnson & Johnson (JNJ)
  • GlaxoSmithKline plc (ADR) (GSK)
  • Novartis AG (ADR) (NVS)
  • sanofi-aventis (ADR) (SNY)
Target (Total: 4)
  • Mylan Inc. (MYL)
  • sanofi-aventis (ADR) (SNY)
  • Endo Pharmaceuticals (ENDP)
  • Merck KGaA

Key Financial Summary:

Key Metrics

  Buyer Target
Number of Employees 5,200 75
Revenue Per Employee 179,286.6 35,697.8
Total Revenue 232.4 0.7
Total Expenses 217.3 9.9
Other Revenue 39.0 0.0
Cost of Revenue 162.9 0.1
SG&A Expense 54.4 3.7
Research & Development 0.0 6.0
Other Operating Expense 0.0 0.0
Operating Income 15.1 -9.1
Unusual Income 0.0 0.0
LT Debt to Capital 30.02 25.18
Fwd P/E 25.68 -5.18
Fwd P/Rev 1.43 64.18
Book Value 428.7 32.1
Curr Portion of LTD/Cap Lease 14.5 1.2

Individual Company Summary

Focused

Buyer

Focused (): Healthcare > Outsourced Services > Development/Manufacturing Services > Sales/Marketing

Target

Focused (): Healthcare > Outsourced Services > Drug Delivery Technology > Oral Delivery

Business Description

Buyer

inVentiv Health Inc. (inVentiv) (formerly Ventiv Health, Inc.) is a provider of value-added services to the pharmaceutical and life sciences industries. inVentiv supports a range of clinical development, communications and commercialization activities in the development of drug products and medical devices. The Company provides services to over 200 client organizations, including 20 global pharmaceutical companies, and numerous emerging and specialty biotechnology companies. inVentiv is organized into three operating segments: inVentiv Clinical, inVentiv Communications and inVentiv Commercial. During the year ended December 31, 2006, inVentiv acquired The Maxwell Group, Inc. and its MedConference brand of services (MedConference), American Speakers Education Research Training LLC; DialogCoach LLC, Synergos, Inc., Jeffrey Simbrow Associates Inc. (JSAI), Synergos, LLP (Synergos), Adheris. In July 2007, the Company completed the acquisition of Chandler Chicco Agency (CCA) and AWAC.

Target

Penwest Pharmaceuticals Co. (Penwest) develops pharmaceutical products based on drug delivery technologies with a focus on products that address disorders of the nervous system. In June 2006, the United States Food and Drug Administration (FDA), approved for marketing Opana ER, an extended release formulation of oxymorphone hydrochloride that the Company developed with Endo Pharmaceuticals Inc (Endo), using its TIMERx drug delivery technology. Penwest is also developing product candidates designed for the treatment of pain, epilepsy, Parkinson?s disease and spasticity, as well as a product candidate for the treatment of edema resulting from congestive heart failure. The Company conducts its business primarily in North America.

Deal Summary

Key Ratios

  Buyer Target
Gross Margin % 28.26 85.73
Operating Margin % 8.41 -1,171.13
Quick Ratio 1.39 6.99
Current Ratio 1.48 7.23
Coverage Ratio -0.16 -0.05
Total Assets 821.5 51.4
Return on Equity % 8.66 -104.45
Return on Assets % 4.52 -65.22
Cash+ ST Inv. Per Share 1.29 1.62
Total Debt 218.4 12.0
Total Debt to Equity % 50.95 37.41
Total Debt to Tangible Equity % n/a 41.44
Debt to Asset % 26.59 23.36

Product Summary

Sector Buyer Target
Business and Public Services  
Business Services  
Professional Services
Includes accounting, advertising, consulting, legal, and printing services.
  
Healthcare
Biopharmaceuticals  
Cardiovascular System
The Cardiovascular System Subsector includes therapeutics that treat disorders affecting the heart and blood vessels.
  
Neurology
The Neurology Subsector includes therapeutics that treat disorders of the central nervous system, including the brain, spinal cord, and nerves.
  
Pain Management
The Pain Management Subsector includes therapeutics that treat and management pain.
  
Healthcare Services  
Support Services
The Support Services Subsector is comprised of companies that provide non-medical services for managing, enhancing, facilitating, and enabling the healthcare delivery process.
  
Outsourced Services
Development/Manufacturing Services
The Development/Manufacturing Services Subsector includes companies that provide research, development, manufacturing, sales and marketing to biopharmaceutical and medical device companies.
  
Drug Delivery Technology
The Drug Delivery Technology Subsector includes companies that develop novel delivery methods for therapeutics.
  

- Focused. Denotes that the company is considered focused in this area. In general, Focused Companies draw the majority of their earnings in the sector/product area specified.

- Sector Pure-Plays. Denotes that the company is focused in the selected sector and generates nearly all earnings in the sector/product area specified.

- Sector Participation. Denotes that the company develops products in this line of business.

Product Details

Sector Buyer Target
Business and Public Services  
Business Services  
Professional Services  
Advertising and Marketing Services  
Advertising Agencies
Companies which provide integrated advertising, marketing and communications services. These services include creating advertisements and advertising campaigns; brand consultancy services, creative services; media buying (procurement of airtime/ad space on radio, television, print, and the internet), and public relations. These companies generally offer the complete range of services which appear in the other sectors of the Advertising and Related Services sector.

Buyer Products:

  • Addison Whitney
  
Business Event/Conference Organizers
Venue and event management, as well as related services, for conferences and other offsite business events.

Buyer Products:

  • MedConference
  
Healthcare
Biopharmaceuticals  
Cardiovascular System  
Heart Disorders  
Angina  
Calcium Channel Blocking Agents
Therapeutics that treat chest pains by preventing the entry of calcium into heart muscle cells.

Target Products:

  • Nifedipine XL
  
Phase I/Phase II Clinical Stage Products
Therapeutics that are being investigated for the treatment of heart and circulatory system disorders in early stages of clinical research where human subject is involved.

Target Products:

  • PW2132 (Torsemide ER)
  
Vascular Disorders  
Hypertension  
Calcium Channel Blocking Agents
Therapeutics that treat high blood pressure by blocking the beta adrenergic receptors of the heart muscle and increasing the excretion of sodium ions, potassium ions, and water through urine.

Target Products:

  • Nifedipine XL
  
Neurology  
Phase I/Phase II Clinical Stage Products
Therapeutics that are being investigated for the treatment of nervous system and mental disorders in early stages of clinical research where human subject is involved.

Target Products:

  • PW4110
  
Research/Preclinical Stage Products
Therapeutics that are being investigated for the treatment of nervous system and mental disorders in very early stages of research where no human subject is involved.

Target Products:

  • PW4153
  • PW4159
  • PW4158
  
Pain Management  
Narcotics  
Opioids
Therapeutics that treat pain by binding to certain nervous system receptors which alter both the perception of pain as well as the emotional response to pain.

Target Products:

  • Opana ER (Oxymorphone Hydrochloride Extended Release)
  
Phase I/Phase II Clinical Stage Products
Therapeutics that are being investigated for the treatment of pain in early stages of clinical research where human subject is involved.

Target Products:

  • PW4142 (Nalbuphine ER)
  
Healthcare Services  
Support Services  
Administrative  
Business Management  
Care Management  
Case Management
Coordination of the delivery of medical care provided by joint collaboration among health care providers and a designated case manager (typically a nurse) with the intent of managing high cost medical conditions.

Buyer Products:

  • inVentiv Patient Outcomes The Franklin Group
  
Disease Management
Management of specific, typically chronic, diseases and conditions where an emphasis is placed on prevention, outcomes analysis, and patient education as management mechanisms.

Buyer Products:

  • inVentiv Patient Outcomes AWAC
  
Consulting
Services providing advice, assistance, and information to a wide range of healthcare companies, including pharmaceutical, medical devices, and health services companies.

Buyer Products:

  • HHI Clinical & Statistical Research Services
  • inVentiv Pharma Analytics
  • Creative Healthcare Solutions, LLC
  
Education Services
Services providing education materials, seminars, and related learning tools to the healthcare industry.

Buyer Products:

  • inVentiv Pharma Services
  • ASERT LLC
  • inVentiv Patient Outcomes Adheris
  • inVentiv Patient Outcomes The Therapeutics Institute
  • DialogCoach
  
Staffing/Recruiting  
General
Staffing and recruiting of personnel that are not directly involved with the delivery of healthcare but that are part of the overall healthcare delivery process (I.e. Hospital administrators, medical office staff, etc.).

Buyer Products:

  • inVentiv Resource Solutions
  • Smith Hanley Consulting Group
  
Outsourced Services
Development/Manufacturing Services  
Contract Research Organizations (CRO)  
Full Service
Contract Research Organizations (CROs) that conduct both preclinical and clinical studies in the development of new therapeutic products.

Buyer Products:

  • Synergos, Inc.
  
Limited Service  
Clinical
Limited Service Contract Research Organizations that design, manage, and monitor human studies of new therapeutics. Other services include project management, patient recruitment, data management, biostatistical analysis, medical and regulatory affairs, and quality assurance.

Buyer Products:

  • HHI Clinical & Statistical Research Services
  
Packaging Services
Outsourced companies that provide packaging services for healthcare products.

Buyer Products:

  • PromoTech Research Associates, Inc.
  
Sales/Marketing
Outsourced companies that provide biopharmaceutical and medical device companies with contract sales and marketing services.

Buyer Products:

  • JSAI
  • Creative Healthcare Solutions, LLC
  • inChord Communications Inc.
  • GSW Worldwide
  • inVentiv Pharma Analytics
  • InVentiv Commercial
  • Jeffrey Simbrow Associates Inc. (JSAI)
  • PromoTech Research Associates, Inc.
  
Drug Delivery Technology  
Oral Delivery  
Hydrogel Based/Polymer Coated
Drug Delivery Technologies used to deliver drugs in a jelly like base which are enclosed using a polymer matrix.

Target Products:

  • SyncroDose
  • Geminex
  • TIMERx
  
Polymer Coated
Drug Delivery Technologies used to deliver drugs in a polymer based matrix to hold/enclose the drug.

Target Products:

  • Gastroretentive Drug Delivery System
  

- Focused. Denotes that the company is considered focused in this area. In general, Focused Companies draw the majority of their earnings in the sector/product area specified.

- Sector Pure-Plays. Denotes that the company is focused in the selected sector and generates nearly all earnings in the sector/product area specified.

- Sector Participation. Denotes that the company develops products in this line of business.

Relationship Details

Key Competitors

  Name Dir Percent Market Cap. P/E Ratio (TTM) Fwd P/E P/R Ratio (TTM) Fwd P/Rev Price To Tang. Book Value
Buyer
  WPP Group plc (ADR) n/a 17,449.918 19.42 16.64 1.44 1.42 n/a
Omnicom Group Inc. n/a 17,081.448 18.69 17.71 1.43 1.36 n/a
Publicis Groupe S.A. (ADR) n/a 7,861.774 12.46 15.49 1.23 1.19 n/a
Interpublic Group of Companies, Inc. n/a 4,973.942 115.44 39.00 0.78 0.77 n/a
Havas (ADR) n/a 2,420.084 37.40 n/a 1.17 n/a n/a
ICON plc (ADR) n/a 1,585.508 33.70 30.07 2.98 2.61 6.14
Allscripts Healthcare Solutions, Inc. n/a 1,459.648 80.02 49.60 5.60 4.94 24.16
Korn/Ferry International n/a 900.108 15.27 12.65 1.24 1.14 2.94
Heidrick & Struggles International, Inc. n/a 730.255 14.90 15.03 1.24 1.16 3.34
Kforce Inc. n/a 550.288 14.69 13.58 0.55 0.53 13.70
Cross Country Healthcare, Inc. n/a 538.459 30.08 22.96 0.78 0.77 13.99
PDI, Inc. n/a 139.688 156.19 n/a 0.83 n/a 1.20
Target
  Johnson & Johnson n/a 190,863.999 18.04 16.24 3.34 3.16 13.68
Elan Corporation, plc (ADR) n/a 10,448.804 n/a -34.81 15.97 14.04 n/a
Biovail Corporation (USA) n/a 2,858.171 13.02 10.20 2.75 3.44 4.70
King Pharmaceuticals, Inc. n/a 2,574.611 8.36 5.85 1.25 1.23 1.90
K-V Pharmaceutical Company n/a 1,505.213 31.66 n/a 3.96 n/a 6.07
Alpharma Inc. n/a 929.815 16.08 22.14 1.36 1.29 1.93
Eurand N.V. n/a 731.542 n/a -79.52 6.39 6.35 9.57
Ligand Pharmaceuticals Inc. n/a 603.788 1.51 2.18 8.33 n/a 12.96
SkyePharma PLC (ADR) n/a 256.721 n/a -4.63 2.48 3.36 n/a
SCOLR Pharma Inc. n/a 128.925 n/a n/a 37.40 n/a 9.30
BioDelivery Sciences International, Inc. n/a 66.577 n/a -2.23 24.06 n/a n/a
Elite Pharmaceuticals, Inc. n/a 49.101 n/a -4.42 35.58 6.30 3.48
Purdue Pharma L.P. n/a n/a n/a n/a n/a n/a n/a

- Defined by the Company - Defined by Others

Dependent Suppliers

  Name Dir Percent Market Cap. P/E Ratio (TTM) Fwd P/E P/R Ratio (TTM) Fwd P/Rev Price To Tang. Book Value
Target
  Mylan Inc. n/a 3,903.698 17.63 12.21 2.17 1.39 5.06
DRAXIS Health Inc. (USA) n/a 226.270 22.92 26.80 2.63 2.60 2.15

- Defined by the Company - Defined by Others

Key Customers

  Name Dir Percent Market Cap. P/E Ratio (TTM) Fwd P/E P/R Ratio (TTM) Fwd P/Rev Price To Tang. Book Value
Overlap
  sanofi-aventis (ADR) n/a 120,772.157 22.87 12.33 2.99 3.11 n/a
Buyer
  Johnson & Johnson n/a 190,863.999 18.04 16.24 3.34 3.16 13.68
GlaxoSmithKline plc (ADR) n/a 145,898.979 13.21 13.20 3.13 3.18 11.63
Novartis AG (ADR) n/a 124,963.848 20.52 16.54 3.29 3.33 5.53
sanofi-aventis (ADR) n/a 120,772.157 22.87 12.33 2.99 3.11 n/a
Eli Lilly & Co. n/a 66,389.582 30.48 16.82 3.91 3.66 7.32
Bristol Myers Squibb Co. n/a 58,882.351 36.80 20.63 3.31 2.97 13.94
Allergan, Inc. n/a 20,436.625 48.11 30.99 5.82 5.35 67.96
Cephalon, Inc. n/a 4,908.411 30.35 19.39 2.65 2.82 18.63
Altana AG (ADR) n/a 3,541.994 5.23 n/a 1.38 n/a 1.53
Boehringer Ingelheim GmbH n/a n/a n/a n/a n/a n/a n/a
Target
  Mylan Inc. 89.10% 3,903.698 17.63 12.21 2.17 1.39 5.06
sanofi-aventis (ADR) n/a 120,772.157 22.87 12.33 2.99 3.11 n/a
Endo Pharmaceuticals n/a 3,759.637 21.20 16.09 3.80 3.55 4.11
Merck KGaA n/a n/a n/a n/a n/a n/a n/a

- Defined by the Company - Defined by Others

Key Partners

  Name Dir Percent Market Cap. P/E Ratio (TTM) Fwd P/E P/R Ratio (TTM) Fwd P/Rev Price To Tang. Book Value
Buyer
  Santarus, Inc. n/a 113.313 n/a -2.15 1.55 1.32 5.20
ClinPhone PLC n/a n/a n/a n/a n/a n/a n/a
SIRO Clinpharm Pvt. Ltd. n/a n/a n/a n/a n/a n/a n/a
Heart Reklambyra AB n/a n/a n/a n/a n/a n/a n/a
Angela Liedler GmbH n/a n/a n/a n/a n/a n/a n/a
Target
  sanofi-aventis (ADR) n/a 120,772.157 22.87 12.33 2.99 3.11 n/a
Mylan Inc. n/a 3,903.698 17.63 12.21 2.17 1.39 5.06
Endo Pharmaceuticals n/a 3,759.637 21.20 16.09 3.80 3.55 4.11
DRAXIS Health Inc. (USA) n/a 226.270 22.92 26.80 2.63 2.60 2.15
Pharmaceutics International, Inc. n/a n/a n/a n/a n/a n/a n/a
Edison Pharmaceuticals, Inc. n/a n/a n/a n/a n/a n/a n/a
Merck KGaA n/a n/a n/a n/a n/a n/a n/a
Otsuka Pharmaceutical Co., Ltd. n/a n/a n/a n/a n/a n/a n/a

- Defined by the Company - Defined by Others

Financials

  Buyer Target Combined Entity
Income Statement
Operating Items
Revenue 703.8 3.0 706.8
Other Revenue 160.2 0.0 160.2
Total Revenue 864.0 3.0 867.0
Cost of Revenue 619.8 0.4 620.2
SG&A Expense 171.5 14.2 185.7
Depreciation & Amortization 0.0 0.0 0.0
Research & Development 0.0 23.7 23.7
Interest Expense 0.0 0.0 0.0
Other Operating Expense 0.0 0.0 0.0
Total Expenses 791.3 38.3 829.6
Operating Income 72.7 -35.3 37.4
Non Operating Items
Interest Expense (Inc.), Net Non-Oprtng -12.0 1.8 -10.2
Other, Net 0.0 0.0 0.0
Income Before Taxes 60.7 -33.5 27.2
Income Taxes 23.6 0.0 23.6
Income After Taxes 37.1 -33.5 3.6
Minority Interest (IS) -1.0 0.0 -1.0
Equity in Affiliates 0.6 0.0 0.6
Net Income - Excl. Xord. Items 36.7 -33.5 3.2
Discontinued Operations 1.0 0.0 1.0
Net Income - Incl. Xord. Items 37.7 -33.5 4.2
Income Avail. to Common 37.7 -33.5 4.2
Share Items
Basic Avg. Shares Outstanding 31.3 23.2 54.5
Basic EPS - Excl. Xord. Items 1.17 n/a 0.06
Basic EPS - Incl. Xord. Items 1.20 n/a 0.08
Full Dilution Adjustment 0.0 0.0 0.0
Fully Diluted Shares Outstanding 32.0 23.2 55.2
F.D. EPS - Excl. Xord. Items 1.15 n/a 0.06
F.D. EPS - Incl. Xord. Items 1.18 n/a 0.08
Balance Sheet
Assets
Cash and Equivalents 41.5 21.0 62.5
ST Investments 0.0 16.6 16.6
Accounts Receivable 211.2 0.6 211.8
Inventory 0.0 0.4 0.4
Prepayments and Advances 0.0 0.9 0.9
Other Current Assets 15.6 0.0 15.6
Current Assets 268.3 39.5 307.8
Accum D&A 0.0 0.0 0.0
PPE, Net 48.8 3.6 52.5
Goodwill & Intangibles 483.0 3.1 486.1
Other Assets 0.0 0.0 0.0
Other LT Assets 21.3 5.1 26.4
Total Assets 821.5 51.4 872.8
Liabilities
Accounts Payable 0.0 1.3 1.3
Payable/Accrued 90.1 0.0 90.1
Accrued Expenses 0.0 2.6 2.6
ST Debt 20.0 0.0 20.0
Curr Port of LTD & Cap Lease Oblg 14.5 1.2 15.7
Other (Current) Liabilities 56.7 0.3 57.0
Current Liab. 181.3 5.5 186.8
LT Debt 162.1 10.8 172.9
Capitalized Lease Obligations 21.8 0.0 21.8
Total LT Debt 183.9 10.8 194.7
Minority Interest (BS) -0.1 0.0 -0.1
Deferred Taxes 12.2 0.0 12.2
Other LT Liab. 15.4 3.0 18.4
Total Liabilities 392.7 19.3 412.0
Shareholders Equity
Common Stock 0.0 0.0 0.1
Additional Paid in Capital 336.3 220.3 556.6
Retained Earnings 92.1 -188.3 -96.3
Other Equity 0.4 0.1 0.5
Total Equity 428.7 32.1 460.8
Total Liab. & Equity 821.5 51.4 872.8
Shares Outstanding 31.7 23.4 55.1
Cash Flow
Operating Cash Flow
CF Net Income 37.7 -33.5 4.2
CF Depreciation 16.1 0.0 16.1
CF Amortization 6.9 0.0 6.9
CF Deferred Taxes 26.4 0.0 26.4
Other Non-Cash Items 21.3 0.0 21.3
Change in Working Capital -44.7 4.5 -40.2
Total Cash From Operating Activities 63.7 -29.0 34.6
Investing Cash Flow (not calculated)
Capital Expenditures -7.1 -2.4 -9.5
Other Investing Cash Flows -80.2 3.4 -76.8
Total Cash From Investing Activities -87.4 1.1 -86.3
Financing Cash Flow (not calculated)
Dividends Paid 0.0 0.0 0.0
Purchase Or Sale of Stock 9.6 3.5 13.1
Purchase and Retirement of Debt -3.6 12.0 8.4
Other Financing Cash Flow 9.1 -0.1 9.0
Total Cash From Financing Activities 15.1 15.4 30.5
Exchange Rate Effects -0.3 0.0 -0.3
Net Change in Cash -8.9 -12.6 -21.5
Cash Taxes Paid 16.3 0.0 16.3
Cash Interest Paid 13.0 0.0 13.0