Quintiles IPO Harvard Case Solution & Analysis

Quintiles IPO

Quintiles IPO


Quintiles was founded by Gillings and Gary Koch in 1982. It is a multinational organization and it is expected to be the largest pharmaceutical service provider. The organization has a well-developed research and development department, which helps the other firms in their product development. About 74% of the total revenue comes through this department and remaining 26% comes through the Integrated Healthcare Service department.

It is expected that the company offers a wide range of services with product development department and Integrated Healthcare department. Moreover, the quality of services provided by the company is high which has changed the biopharma by adding value to the services and also this has decreased cost with the help of decrease in the number of trial failures.

The major holding of the company is expected to be owned by the founder and other four private firms. In order to take advantage of the current position of the company and of economic conditions in the market, the owner and its partners are considering different strategic alternatives for the purpose of expansion. The various alternatives are considereed by the management are merger or acquisition, Initial Public Offering (IPO) and capital restructuring through special dividends.
Problem Identification

In the year 2012, the founder of the Quintiles Inc. and its four private firms’ partners are planning to expand the organization in order to take the advantage of competitive position of the organization. Standing at the end of the year 2012, Quintiles Inc. is a private firm and its shareholders are considering different strategic alternatives including IPO, Acquisition and Merger and capital restructuring through paying special dividend.

In order to evaluate the best alternative, firms hire a famous investment bank. As the associate of the leading investment bank, the best alternative needs to be recommended.
Alternative options

There are three strategic alternatives available to the management of the company through which the organization can expand in order to take the advantage of competitive position of the company. It is expected that the founder and private equity partners of the company could monetize their positions are evaluated and analyzed below with their respective advantage and disadvantages.
Merger or Acquisition

The first available alternative is of merger or acquisition. It is expected that by following this alternative the management of the company could acquire or merge with another firm in order to expand. For this purpose, the company could merge with another financial or strategic buyer.

Covance is expected to be most suitable company in order to merge or acquire as it is also operating in more than 100 countries like Quintiles. The sales growth of this company is 5.24% which is lower than other companies however, it is expected that serving same countries as of Quintiles will give it an edge over other companies

It is expected that by acquiring Covance it could increase and strengthen its operations in all 100 countries in which it is operating as it is expected that both Quintiles and Covance are operating in same and equal number of countries, therefore there is a chance of creating network economy.

By achieving Network Economy Company, it could access more number of users and could market its products more efficiently. Merger and acquisition are always cheap and faster sources of growth and in present condition it could be the best available option for funding and development of new products and services as both companies have huge available budget for this purpose. Moreover, research and development is the key of success in pharmaceutical industry.

It is also expected that by merging with Covance the fixed expenditure of the company will decrease as it will spread upon two countries and will also help to achieve economies of scale which will reduce the cost of both companies and will increase the revenue, which will ultimately provide a competitive advantage to the firm over other pharmaceutical firms....................

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