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inVentiv to buy Chandler Chicco

inVentiv Health has agreed to acquire Chandler Chicco Agency in a deal expected to close during Q3 2007

inVentiv Health has agreed to acquire the independent, healthcare-focused public relations firm Chandler Chicco Agency (CCA) in a deal that is expected to close during Q3 2007.

inVentiv, which provides a wide range of commercialisation and complementary services to pharma and biotech firms, said the acquisition would expand its PR offering, broaden its global capabilities and create new growth opportunities

Somerset, New Jersey-based inVentiv will pay USD 52m (EUR 38.2m) in cash and USD 13m (EUR 9.5m) in stock for CCA and may also make future earn-out payments if the agency exceeds certain financial targets. The company said the acquisition of CCA is expected to be immediately accretive to its earnings.

Once the deal is finalised, New York City-based CCA will operate within inVentiv Health's inVentiv Communications division as a wholly owned subsidiary. The division also includes GSW Worldwide, Palio Communications, Blue Diesel, The Centre for Biomedical Continuing Education and a number of other companies.

Despite becoming a subsidiary of the larger firm, CCA will continue to operate with a great deal of independence, CCA principal and co-founder Gianfranco Chicco said during a telephone interview with Communiqué: We have a very comprehensive, autonomous agreement with inVentiv, and I'll be operating completely autonomously within the organization's communications division.î

Chicco and principal and co-founder Robert Chandler will remain at the helm of the company, reporting directly to Bill O'Donnell, president and COO of inVentiv Communications.

Chicco said one reason autonomy is so important is that it will help preserve the unique culture that CCA is known for ñ a culture that includes a flat structure in which employees aren't labelled with specific job titles. "We are very, very committed to maintaining our culture," he said. "inVentiv knows they are acquiring a culture of success and they are not going to interfere with that."

Chicco said the decision to be acquired was driven in large part by the fact that the move is expected to help fuel CCA's ambitious plans for growth. The company currently has annual revenues of about USD 50m (EUR 36.7m), and its goal is to double that figure within the next four years, with much of the growth expected to come through expansion in key European markets.

Growth will also be driven by acquisitions and by maximising synergies with inVentiv, Chicco said. "We share a number of clients with inVentiv, and there are a number of opportunities for us with some of their existing clients as well," he noted. CCA's client roster currently includes Allergan, Bristol-Myers Squibb, GlaxoSmithKline, Eli Lilly, Novartis, sanofi-aventis, and Novo Nordisk, among other major players in the healthcare arena. In all, the agency supports more than 60 brands.

During a conference call with the media, inVentiv Communications CEO Blane Walter said that from his company's perspective, there were three key reasons for making the acquisition of CCA: "First, PR is an increasing area of focus for our clients; second, CCA is a very well positioned leader in healthcare with strong growth outlook; and third, there is significant opportunity to pursue shared growth opportunities."

CCA was attractive in part because of its "excellent client retention," Walter added. "Nearly all of the active clients that CCA had five years ago are still active clients today."

The acquisition marks the second time this year that inVentiv has scooped up an independent healthcare-focused PR agency: in February, the company announced that it was buying Chamberlain Communications Group for USD 13m (EUR 9.6m) in cash and stock, plus potential earn-out payments.

CCA was founded in 1995 by Chandler and Chicco. The firm currently has about 250 employees across its multiple specialty communications divisions, which include Biosector2, BrandTectonics, CCA Advertising, Determinus, Litmus and ënition.

4th July 2007

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