Fortrea Completes Divestiture of Endpoint Clinical and Patient Access Businesses to Arsenal Capital Partners
Fortrea (Nasdaq: FTRE) has finalized the divestiture of its Endpoint Clinical and Fortrea Patient Access businesses to Arsenal Capital Partners. The deal allows Fortrea to focus on its core mission as a clinical contract research organization (CRO) while using the proceeds to reduce its debt structure. Endpoint Clinical and Fortrea Patient Access, both leaders in their respective fields, will benefit from Arsenal's expertise and resources. Sam Osman, former head of Fortrea's Enabling Services, will lead the newly independent entities as CEO, with Ray Hill serving as chairman.
- Fortrea completed the divestiture deal, which enables it to streamline operations and reduce debt.
- Proceeds from the divestiture will be used to reduce a portion of Fortrea’s overall debt structure.
- Endpoint Clinical and Fortrea Patient Access will now have focused leadership and executive oversight from Arsenal Capital Partners.
- Arsenal Capital Partners brings significant domain expertise in healthcare and industrial growth.
- Sam Osman, experienced in leading Endpoint and FPA, will continue as CEO, ensuring continuity.
- Ray Hill’s involvement as chairman provides strategic leadership to Endpoint and FPA.
- Endpoint Clinical has a proven track record, supporting over 1,750 clinical trials involving 875,000 patients.
- Fortrea Patient Access supports over 2.5 million patients and 100 unique brands across 25 disease indications.
- Divesting Endpoint Clinical and Fortrea Patient Access may reduce Fortrea’s diversified revenue streams.
- The divestiture could lead to operational adjustments and potential short-term disruptions.
- Reduction in assets might limit Fortrea's future expansion capabilities in the RTSM and patient access sectors.
Insights
Fortrea's divestiture of Endpoint Clinical and Fortrea Patient Access businesses to Arsenal Capital Partners is a strategic move that carries significant financial implications. The
From a debt reduction perspective, this transaction is favorable as it allows Fortrea to focus on its core business of being a pure-play clinical CRO. A lower debt burden may also contribute to better financial ratios and potentially higher credit ratings, making it easier and cheaper to raise capital in the future.
However, investors should consider the immediate impact on revenue streams, as divesting these segments may reduce short-term revenues. The company's future performance will largely hinge on its ability to leverage the remaining business segments to generate comparable or superior returns.
Overall, this move should be seen as a strategic realignment rather than a short-term gain, with its benefits likely to manifest over the long haul.
The transaction between Fortrea and Arsenal Capital Partners also reflects broader trends in the contract research organization (CRO) market. By divesting its Endpoint Clinical and Fortrea Patient Access businesses, Fortrea is aligning itself more closely with the high-demand clinical trial services sector. This move can be interpreted as an attempt to strengthen its market position in this growing and competitive industry.
Arsenal Capital Partners specializes in building market-leading companies, particularly in the healthcare and industrial sectors, implying that Endpoint and Fortrea Patient Access may see accelerated growth and possibly even technological advancements under Arsenal's guidance. This could intensify competition in the CRO market, but it could also lead to improved and more innovative solutions for industry stakeholders.
Retail investors should view this as a potentially win-win situation for both Fortrea and the divested businesses now under Arsenal's wing. The focus here is on long-term strategic alignment and optimization of resources, making it a positive development for long-term growth.
DURHAM, N.C., June 04, 2024 (GLOBE NEWSWIRE) -- Fortrea (Nasdaq: FTRE) a leading global contract research organization (“CRO”), today announced it has completed the divestiture of assets relating to its Enabling Services segment, namely its Endpoint Clinical (“Endpoint”) and Fortrea Patient Access (“FPA”) businesses, to Arsenal Capital Partners (“Arsenal”), a leading private equity firm specializing in building market-leading, technology-rich healthcare and industrial growth companies.
Endpoint and FPA provide best-in-class Randomization and Trial Supply Management (RTSM) and patient access solutions respectively. They both represent strategically differentiated entry points within the pharmaceutical services value chain, where Arsenal holds significant domain, scientific and technical knowledge.
Arsenal has appointed Sam Osman, former president of Fortrea’s Enabling Services segment, to serve as chief executive officer of the new entities, and Raymond (“Ray”) H. Hill, an operating partner within Arsenal’s healthcare team, will serve as chairman of the board.
“Endpoint and FPA are distinctly positioned to support the patient journey across clinical trials and through access to novel therapeutics after approval,” said Sam Osman, chief executive officer of Endpoint and FPA. “With Arsenal as our partner, I am confident that both our businesses and our teams will benefit from accelerated growth opportunities as well as investment and executive focus, resulting in enhanced capabilities and solutions for customers.”
“The successful closing of this transaction is a testament to the caliber of the teams involved, who have planned a smooth transition for colleagues, customers and the patients we serve,” said Fortrea Chairman and CEO Tom Pike. “This transaction enables both organizations to focus their leadership and resources on delivering optimal solutions for our customers. As previously disclosed, the net proceeds from this divestiture will be used to reduce a portion of Fortrea’s overall debt structure. As a pure-play clinical CRO, Fortrea remains committed to our mission of delivering solutions that bring life-changing treatments to patients faster.”
Ray Hill, an operating partner of Arsenal and chairman of the board for Endpoint and FPA, said, “I am incredibly excited to be a part of Endpoint and FPA’s next chapter. I look forward to working with the management team in building a strategically important company that provides data-driven solutions for patients.”
Endpoint Clinical
Endpoint operates in the high growth eClinical market as a leading provider of Randomization and Trial Supply Management (RTSM) solutions to biopharmaceutical and CRO customers with expertise in serving complex and late-stage clinical trials. For more than 15 years, Endpoint has had a successful track record of effectively supporting more than 1,750 clinical trials involving 875,000 patients across 90 countries and has cultivated a blue-chip customer base and nurtured long-standing strategic relationships.
Fortrea Patient Access
Fortrea Patient Access is a scaled leader in the HUB services and patient access market, serving the biopharmaceutical industry with comprehensive patient support, product access, affordability and adherence solutions for more than 30 years. Further advanced by its recently expanded non-commercial specialty pharmacy, FortreaRx™, to support enhanced distribution of cold-chain and ambient free goods products, Fortrea Patient Access is committed to driving patient outcomes and improving healthcare accessibility through its extensive experience while currently supporting more than 2.5 million patients and over 100 unique brands across more than 25 disease indications.
About Arsenal Capital Partners
Arsenal Capital Partners is a leading private equity investment firm that specializes in building market-leading industrial growth and healthcare companies. Since its inception in 2000, Arsenal has raised institutional equity investment funds totaling over
About Fortrea
Fortrea (Nasdaq: FTRE) is a leading global provider of clinical development solutions to the life sciences industry. We partner with emerging and large biopharmaceutical, biotechnology, medical device and diagnostic companies to drive healthcare innovation that accelerates life changing therapies to patients. Fortrea provides phase I-IV clinical trial management, clinical pharmacology and consulting services. Fortrea’s solutions leverage three decades of experience spanning more than 20 therapeutic areas, a passion for scientific rigor, exceptional insights and a strong investigator site network. Our talented and diverse team working in more than 90 countries is scaled to deliver focused and agile solutions to customers globally. Learn more about how Fortrea is becoming a transformative force from pipeline to patient at Fortrea.com and follow us on LinkedIn and X (formerly Twitter).
Cautionary Statement Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, including the timing of the use of net proceeds to repay a portion of the Company’s outstanding debt. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as “guidance,” “expect,” “assume,” “anticipate,” “intend,” “plan,” “forecast,” “believe,” “seek,” “see,” “will,” “would,” “target,” similar expressions, and variations or negatives of these words that are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results could differ materially from these forward-looking statements due to a number of factors, including, but not limited to factors described from time to time in documents that the Company files with the SEC. For a further discussion of the risks relating to the Company’s business, see the “Risk Factors” Section of the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (the "SEC"), as such risk factors may be amended or updated from time to time in the Company’s subsequent periodic and other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included or incorporated by reference in the Company’s filings with the SEC. All forward-looking statements are made only as of the date of this release, and the Company does not undertake any obligation, other than as may be required by law, to update or revise any forward-looking statements to reflect future events or developments.
Fortrea Contacts:
Hima Inguva (Investors) – 877-495-0816, hima.inguva@fortrea.com
Sue Zaranek (Media) – 919-943-5422, media@fortrea.com
Kate Dillon (Media) – 646-818-9115, kdillon@prosek.com
Arsenal Contact:
Ellen Pavlovsky – epavlovsky@arsenalcapital.com
FAQ
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