Health Care, Manufacturing, and Technology

Medical research company selling business for $800M

February 14, 2018
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MPI and partners to build molecular imaging lab in Mattawan
MPI Research is located in Mattawan, west of Kalamazoo. Courtesy MPI Resarch

A medical research company in the region has signed a definitive agreement to be acquired by an out-of-state company for about $800 million in cash.

Charles River Laboratories International (NYSE: CRL), based in Wilmington, Massachusetts, is acquiring Mattawan-based MPI Research.

The transaction is expected to close early in the second quarter of 2018, subject to regulatory approvals and customary closing conditions.

MPI is a non-clinical contract research organization providing testing services to biopharmaceutical and medical device companies worldwide.

Acquiring MPI will strengthen Charles River’s ability to partner with clients across the drug discovery and development continuum.

“In addition to meeting our disciplined acquisition criteria, MPI is an exceptional strategic fit for Charles River, because it incorporates the key attributes we require in an acquisition: access to growing end markets, high-quality services, scientific expertise and complementary capabilities,” said James Foster, chairman and CEO, Charles River Laboratories. “MPI’s one-million-square-foot, single-site facility in Michigan will provide needed capacity to meet current and future demand.

“In addition to enhancing our value proposition for clients, we believe that the acquisition of MPI will generate value for shareholders, driving profitable revenue growth."

The acquisition is expected to add $170 to $190 million to Charles River’s 2018 consolidated revenue, based on the anticipated timing of the close, and $260 to $280 million to 2019 consolidated revenue.

MPI is expected to be reported as part of Charles River’s Discovery and Safety Assessment segment.

The project is expected to be financed through an expansion of Charles River’s credit facility and cash. The company is evaluating fixed-rate debt financing alternatives, which could be used to finance the acquisition and for general corporate purposes.

Advisors

Jefferies and SunTrust Robinson Humphrey are acting as financial advisors to MPI. Weil, Gotshal & Manges is acting as MPI’s transactional legal counsel.

Morgan Stanley & Co. is acting as the exclusive financial advisor to Charles River. Davis Polk & Wardwell is acting as Charles River’s transactional legal counsel, and Axinn, Veltrop & Harkrider is acting as anti-trust counsel.

Charles River

Charles River Laboratories International provides products and services to help pharmaceutical and biotechnology companies, government agencies and academic institutions around the globe accelerate their research and drug development efforts.

Employees provide clients with what they need to improve and expedite the discovery, early stage development and safe manufacture of new therapies for the patients who need them.

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