Behrman Nets 3.6x From Research Company

Target: WIL Research Holding Co. Inc.

Price: $500 million

Seller: Behrman Capital Partners

Sponsor: Undisclosed

Financial Advisor: Seller: Bear Stearns

Legal Advisor: Seller: Goodwin Procter

Exit Multiple: 3.6x

Behrman Capital Partners earned 3.6x its investment upon exiting WIL Research Holding Co. Inc. this month. Partly to thank were two add-on acquisitions and a flood of money pouring into pharmaceutical research during its holding period.

In an unusual twist, the purchase price of the company was disclosed—$500 million; however, the name of the financial sponsor that bought the company was not. Behrman Capital reported an IRR of 63 percent on the deal. “It was not for sale,” Managing Partner Grant Behrman said of WIL Research. “The financial sponsor that ultimately prevailed provided us with a pre-emptive offer, which we believed we should act upon, and did.”

Behrman Capital, based in New York and San Francisco, bought WIL Research for $105 million in 2004, when Great Lakes Chemical Corp. divested its toxicological services business. Ohio-based WIL Research provides non-clinical research for drug and biotech companies.

Behrman Capital’s timing was excellent. It bought WIL Research just as the Federal Drug Administration began mandating more analysis of new products and as drug companies increasingly began outsourcing some of their research functions, Behrman said.

The LBO firm, which was joined on the deal by TPG’s venture arm, subsequently added two companies to the platform: NOTOX, a Dutch research company, acquired for $60 million in 2005, and QS Pharma, a Pennsylvania company in a related field, in 2006. “These were acquisitions that broadened our geographic reach as well as service spectrum,” Behrman said.