Jordan Takes Drug Testing Platform Global

Target: MediQuest

Price: Undisclosed

Sponsor: Jordan Co. (Worldwide Clinical Trials Inc.)

A Jordan Co.-backed drug-testing company that started as little more than an idea 15 months ago completed its fifth deal earlier this month, helping the venture establish a global footprint.

The platform company, Worldwide Clinical Trials Inc., paid an undisclosed sum for MediQuest, a contract research company based in Serbia. With the acquisition, Worldwide Clinical is now composed of five different companies, two based in the United States, one in England, one in Russia and the last in Serbia. New York-based Jordan Co. has funded all five acquisitions with equity.

The firm hatched the concept of Worldwide Clinical over a lunch at a Beverly Hills hotel in early 2007 with Dr. Neal Cutler, who had previously built up and sold two drug-testing businesses. Launched that spring, Worldwide Clinical, which focuses on nervous system and cardiovascular drugs, started with three main assets: Cutler, his chief financial officer, and an equity pledge from Jordan Co. “We started with nothing,” said David Butler, a principal at the buyout shop. “We had an idea and a wonderful, proven executive.”

It costs an average of $1 billion and takes more than 10 years to move a drug from the laboratory to the marketplace. The most difficult obstacle lies in finding patients for clinical trials. Jordan Co. and Cutler set out to create an outsourced provider of clinical trials to do just that, in part by drawing on populations around the world.

The company completed all five of its acquisitions in the last six months, and now plans to take a break from deals to concentrate on building those businesses. Longer term, Worldwide Clinical is probably three or four acquisitions away from achieving its optimal size, Butler said. The company would likely look to buy companies that specialize in providing brain and spinal scans, since those images make it possible to track how nervous system drugs affect the brain and spinal column. Scans are becoming an increasingly important aspect of testing protocols for nervous system drugs.

The firm is also contemplating the launch of a new holding company that will target a different diseases within the drug-testing industry, Butler said.

Worldwide Clinical is the Jordan Co.’s third foray into the health care industry since 2006. The firm also owns Harrington Holdings, a medical products distributor, and Wound Care Holdings, which sells wound services to hospitals and makes equipment used in treating wounds.

Worldwide Clinical resides in the portfolio of Jordan Co.’s second fund, which closed earlier this year with $3.6 billion in commitments.

Jordan Co. followed a similar build-up strategy with TTS LLC, a systems services company that the firm has built up through seven acquisitions since 2007.