OR WAIT 15 SECS
PAREXEL International Corporation (Nasdaq: PRXL) announced the Company acquired all of the outstanding equity securities of Liquent, Inc., a global provider of Regulatory Information Management (RIM) solutions. Liquent provides an integrated platform of software solutions for regulatory submissions and product registration management, as well as a range of complementary business process outsourcing capabilities. Liquent was founded in 1994, and its clients include more than 200 biopharmaceutical and life sciences companies. With headquarters in Horsham, Pennsylvania, and additional offices in the United Kingdom, Germany and India, the Company employs nearly 300 individuals. Prior to the sale, Liquent was owned by Marlin Equity Partners. The purchase price was approximately $72 million (which was adjusted at closing to reflect Liquent’s cash, indebtedness and working capital balances at closing), and was funded through the expansion of one of the Company’s existing credit facilities.
Josef von Rickenbach, Chairman and CEO of PAREXEL stated, “The acquisition of Liquent further strengthens our regulatory capabilities by adding a robust information technology platform. Through Liquent’s flagship software platform, InSight®, our clients will have access to comprehensive regulatory agency submission planning, viewing, tracking, publishing, and registration management throughout the entire lifecycle of a medicinal entity. We are pleased to be able to provide this new offering and believe that it will enhance the portfolio of products and services that we provide through our Perceptive Informatics business. We expect the acquisition will also benefit the PAREXEL Consulting and Medical Communications Services business, where we will be able to leverage Liquent’s significant expertise in regulatory information management outsourcing through its Liquent Direct® solutions.”
In conjunction with the completion of the acquisition of Liquent and other factors covered in this release, PAREXEL also updated its forward-looking financial guidance for the second quarter of Fiscal Year 2013 (ending December 31, 2012) and for the full Fiscal Year (ending June 30, 2013). PAREXEL has increased its forward-looking service revenue guidance for the second quarter as a result of accelerated project performance, and for the full Fiscal Year as a result of the positive contributions from the Liquent acquisition, as well as better overall performance. Including these factors, the Company anticipates reporting consolidated service revenue in the range of $415 to $420 million for the second quarter of Fiscal Year 2013, and in the range of $1.675 to $1.695 billion for Fiscal Year 2013 in its entirety. Of the increase, the Liquent acquisition is expected to contribute a small amount of service revenue in the second quarter and between $17 and $23 million in service revenue during the second half of Fiscal Year 2013. Previously issued consolidated service revenue guidance was $400 to $410 million for the second quarter, and $1.630 to $1.660 billion for the Fiscal Year.
The Liquent acquisition is expected to have a dilutive effect on earnings per share as reported under Generally Accepted Accounting Principles (GAAP) in the range of $0.02 to $0.04 for Fiscal Year 2013, including the amortization of intangibles and other costs. Excluding the amortization of intangibles and other costs, the acquisition is expected to be accretive. In addition to the impact from Liquent, the Company expects to have slightly better operating performance. Taking into account the afore-mentioned factors, PAREXEL now anticipates reporting GAAP diluted earnings per share in the range of $0.33 to $0.34 for the second quarter of Fiscal Year 2013 and in the range of $1.32 to $1.39 for Fiscal Year 2013. Adjusted earnings per diluted share are expected to be between $1.36 and $1.43 for Fiscal Year 2013 (adjusted earnings per diluted share is a non-GAAP measure that excludes the impact of certain items that were recorded in the first quarter of Fiscal Year 2013 and reconciled to GAAP in the Company’s press release dated October 30, 2012 including the sale of a building, a favorable adjustment to restructuring reserves, a charge relating to a dispute, and one-time adjustments to deferred tax assets, but does not include any items related to the acquisition of Liquent).
Previously issued guidance was for GAAP earnings per diluted share to be in the range of $0.31 to $0.33 for the second quarter of Fiscal Year 2013 and in the range of $1.30 to $1.40 for Fiscal Year 2013. For the full Fiscal year, adjusted earnings per diluted share had been expected to be in the range of $1.34 to $1.44 (adjusted earnings per diluted share excluded the impact of the special items that were recorded in the first quarter as referenced above).
With regard to other events, delays in decision-making by clients are expected to lead to softer new business wins in the second quarter of Fiscal Year 2013, and a shift of pending requests for proposals into the third quarter of Fiscal Year 2013. The Company has taken this into account in the revised financial guidance that has been issued in this press release.
In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), the Company uses certain non-GAAP financial measures. The Company believes that presenting the non-GAAP financial measures contained in this press release assists investors and others in gaining a better understanding of its core operating results and future prospects, especially when comparing such results to previous periods or forecasted guidance, because such measures exclude items that are outside of the Company's normal operations and/or, in certain cases, are difficult to forecast accurately for future periods. Management uses non-GAAP financial measures, in addition to the measures prepared in accordance with GAAP, as the basis for measuring the Company's core operating performance and comparing such performance to that of prior periods and to the performance of its competitors for the same reasons stated above. Such measures are also used by management in its financial and operating decision-making. Non-GAAP financial measures are not meant to be considered superior to or a substitute for the Company's results of operations prepared in accordance with GAAP.