Case Detail

Case Summary

Quintiles IPO

Case Number: 5-413-756, Year Published: 2014

HBS Number: KEL843

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Authors: David Stowell; Vishwas Setia

Key Concepts

Cash Flow Analysis, Corporate Governance, Financial Analysis, Financial Statements, Financial Strategy, Health Care, IPO, Private Equity, Shareholder Value Added, Valuation

Abstract

Quintiles Transnational Holdings Inc., the largest global provider of biopharmaceutical development and commercial outsourcing services, grew its revenue at a CAGR of 7.3% and EBITDA at 13.9% between 2008 and 2012.

The case is set in December 2012–April 2013, when the majority of the firm was owned by founder Dennis Gillings and four private equity firms (Bain Capital, TPG Capital, 3i Capital and Temasek Life Sciences) after it was taken private in a management-led buyout in 2003 and a subsequent buyout in 2008. Five years after the second buyout, the private equity firm owners were looking to monetize their positions and considered different strategic alternatives: M&A sale to strategic or financial buyers, IPO, or capital restructuring through special dividends.

Students will step into the role of an associate at the lead investment bank working with Quintiles. They must consider the case information and determine an IPO strategy, process, potential conflicts, and valuation.

Learning Objectives

After reading and analyzing the case, students will be able to:

  • Apply valuation techniques (discounted cash flow (DCF) and publicly traded comparables) in pricing an IPO
  • Analyze the roles of different parties involved in the transaction
  • Discuss the process of a company filing for an IPO
  • Evaluate different strategic alternatives available to a private equity–backed company
  • Address conflict of interest in management-led buyouts

Number of Pages: 24

Extended Case Information

Teaching Areas: Finance

Teaching Note Available: Yes

Geographic: Global

Industry: Biopharmaceutical development

Organization Name: Quintiles Transnational Holdings

Organization Size: Large

Year of Case: 2013