(Bloomberg) -- A consortium backed by Elliott Investment Management agreed to buy drug-research services company Syneos Health Inc. for about $4.4 billion. 

The investor group also includes former KKR & Co. dealmaker Jim Momtazee’s Patient Square Capital and buyout firm Veritas Capital, according to a statement Wednesday, which confirmed an earlier Bloomberg News report. They will acquire the North Carolina-based firm for $43 per share in cash, a 24% premium to its last close before news of a potential sale emerged in February.

The deal, which values Syneos at $7.1 billion including debt, adds to a wave of transactions involving companies that support drug development. Investors favor the sector as a way to gain exposure to pharmaceutical spending without the risk of investing directly in biotech companies whose success or failure rides on the therapies they’re testing.

Thermo Fisher Scientific Inc. in 2021 purchased PPD Inc., a provider of clinical and research services, for $17.4 billion. A few months later, buyout firm EQT AB and Goldman Sachs Asset Management agreed to acquire Parexel for $8.5 billion.

Clinical Trials

Syneos, which helps drug companies conduct clinical trials, was formed through the 2017 merger of INC Research Holdings and InVentiv Health, which had been backed by Thomas H. Lee Partners and Advent International. They later sold their stake in Syneos.

In November, Syneos cut its per-share guidance for 2022 and said it signed fewer new contracts, prompting investor concern about its prospects.

Syneos said the takeover is expected to be completed in the second half of the year, subject to shareholder approval and regulatory clearance. The investment firms plan to keep the company’s headquarters in Morrisville, North Carolina, according to Wednesday’s statement. 

Buyout Deals

Elliott, run by billionaire Paul Singer, has a private equity affiliate known as Evergreen Coast Capital. It’s been involved in several large transactions in recent years, including the $16 billion takeover of Nielsen Holdings Plc with Brookfield Asset Management Inc.

New York-based Veritas Capital, led by Ramzi Musallam, teamed up with Elliott to buy health-care technology company Athenahealth in 2018. They sold control of it to a consortium of private equity firms in a $17 billion deal in 2021. Patient Square Capital is a health-care focused private equity firm started in 2020 by Momtazee.

Centerview Partners and Bank of America Corp. acted as financial advisers to Syneos on the deal, while Ernst & Young provided additional strategic advice. 

Goldman Sachs Group Inc., UBS Group AG, Royal Bank of Canada, Bank of Montreal, HSBC Holdings Plc, Wells Fargo & Co., Citigroup Inc., Jefferies Financial Group Inc., Macquarie Group Ltd., Natixis SA and Truist Financial Corp. are providing committed financing for the acquisition. 

(Updates with additional details of transaction from seventh paragraph.)

©2023 Bloomberg L.P.