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PAREXEL International (PRXL) Buys Liquent; Increases 2Q Guidance

 December 27, 2012 10:28 AM

(By Balaseshan) PAREXEL International Corp. (NASDAQ: PRXL) said it has purchased all outstanding equity securities of Liquent Inc. for about $72 million, and the biopharmaceutical services company increased its financial guidance for the second quarter.

The Liquent acquisition is expected to have a dilutive effect on earnings per share (EPS) as reported under GAAP in the range of $0.02 to $0.04 for fiscal 2013. Excluding items, the acquisition is expected to be accretive.

In addition, the company expects the deal 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 2013.

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The purchase price for Liquent 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 PAREXEL's existing credit facilities. Prior to the sale, Liquent was owned by Marlin Equity Partners.

Liquent, which is a global provider of Regulatory Information Management (RIM) solutions, 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.

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In conjunction with the completion of the acquisition of Liquent, PAREXEL also updated its financial guidance for the second quarter and for the full year 2013. In addition to the impact from Liquent, the company expects to have slightly better operating performance.

For the second quarter, the company raised EPS guidance to range of $0.33 to $0.34 from previous forecast of $0.31 to $0.33. PAREXEL lifted service revenue outlook to range of $415 million to $420 million from previous estimate of $400 million to $410 million. Street analysts predict EPS of $0.32 on revenue of $405.08 million.

For the full-year 2013, PAREXEL narrowed its adjusted EPS expectations to range of $1.36 to $1.43 from previous estimate of $1.34 to $1.44. The company increased its service revenue guidance to range of $1.675 billion to $1.695 billion from previous forecast of $1.63 billion to $1.66 billion. Street predicts EPS of $1.39 on revenue of $1.65 billion.

PAREXEL has increased its 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.

PRXL is trading down 1.87% at $28.96 on Thursday. The stock has been trading between $20.11 and $33.13 for the past 52 weeks.



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