Quintiles to pay $25 million to founder, others investors, after IPO

Apr. 03, 2013 @ 06:58 PM

After Durham-based Quintiles goes public, the company’s founder and other executives at the investment firms that own the majority of the company’s stock are expected to divvy up a one-time fee of $25 million, according to a regulatory statement filed Tuesday.

Quintiles is a Durham-based multinational company that manages clinical trials and provides other contract services for pharmaceutical companies. In February, the company filed for a proposed initial public offering with the U.S. Securities and Exchange Commission that would raise a proposed $600 million through stock sales.

In Tuesday’s SEC filing, the company said an agreement is expected with Gillings and others for payment of a one-time fee of $25 million.

That payment would be made as part of an agreement to end another deal through which annual payments of at least $5 million have been made to a group of investor executives since a major reorganization of the company’s shareholders in January of 2008.

They work with firms that bought ownership stakes in Quintiles, and have split the annual fee, adjusted upwards for inflation, in exchange for advisory services, according to the filing.

The annual payments were made to a group that includes Gillings, who controls GF Management Company, and other managers at Bain Capital, TPG Global, 3i Corp., Cassia Fund Management and Aisling Capital.

Under the agreement, Aisling has received $150,000 per year, and the remaining $4.9 million has been paid in proportion to the respective ownership share in the company of the investor affiliates.

As of Feb. 28, Gillings, other partnerships he’s connected to and family members owned 23.7 percent of the company’s shares.

Bain Capital and related funds owned 22.9 percent, TPG Funds owned 22.9 percent, affiliates of 3i owned 15.1 percent, and Temasek Life Sciences Private Limited owned 9.7 percent.

It’s expected the new agreement with Gillings and the other shareholders will terminate that previous management agreement after the company goes public. And the investor affiliates would receive the one-time termination fee of $25 million.

Phil Bridges, a spokesman for Quintiles, said in an email that the company is in the traditional quiet period as required by the SEC, and could not comment on the filing.