Paraxel International Corporation
), a provider of biopharmaceutical services, recently acquired
all the outstanding equity securities of Liquent, a worldwide
provider of Regulatory Information Management (RIM) solutions for
The acquisition will be immediately accretive to Paraxel's top-
and bottom-line in fiscal 2013 (ending June 30, 2013). However,
fiscal 2013 reported earnings will be negatively impacted by
about 2-4 cents per share.
Paraxel revised its guidance for the second quarter of fiscal
2013 (ending December 31, 2012) as well as fiscal 2013. Based on
its accelerated project performance, the company updated its
guidance for service revenue for the second quarter of fiscal
2013 to the range of $415 million to $420 million compared with
the earlier guidance of $400 million to $410 million. The Liquent
contribution is expected to contribute $17 million to $23 million
to second quarter revenues.
Paraxel raised its outlook for fiscal 2013 revenues to the range
of $1.675 billion to $1.695 billion compared with the prior
outlook of $1.63 billion to $1.66 billion. The raised guidance is
primarily on the back of contributions from the Liquent
Accordingly, Paraxel revised its earnings per share guidance for
the second quarter as well as fiscal 2013. The company forecast
second quarter fiscal 2013 reported earnings per share in the
band of 33 cents and 34 cents compared with 31 cents and 33 cents
Fiscal 2013 adjusted earnings per share are envisaged in the band
of $1.36 and $1.43 (earlier $1.34 to $1.44). The current Zacks
Consensus Estimate of $1.38 is within Paraxel's guidance range.
Liquent offers an integrated platform of software solutions to
its client base of more than 200 biopharmaceutical and life
science companies. The solutions are used in regulatory
submissions and product registration management, as well as a
range of complementary business process outsourcing capabilities.
The acquisition should hasten Paraxel's regulatory business
processes due to enhanced regulatory capabilities from Liquent's
solid information technology platform.
Following the acquisition, Paraxel will strengthen its perceptive
informatics business. The company's consulting and medical
communications franchise will also gain from the buyout.
With a background of robust growth and strong backlog, we are
optimistic of Paraxel successfully reaching its top- as well as
bottom-line goals. Further, growth will be buoyed by the
company's effort to expand its portfolio.
We currently have a long-term 'Neutral' recommendation on the
stock which carries a short-term Zacks #3 Rank (Hold). Its peer
) carries a Zacks #2 Rank (Buy).
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