Unrelenting pressure to hold down costs and demand for better drugs has made pharma services a critical market for dealmakers. Competition is stiff and is expected to grow even more intense. Sponsors are attracted to pharma services companies because they speed up and improve the efficiency of clinical and pre-clinical studies. These deals allow sponsors to tap into the huge sums of money that go into drug-making without the huge risks that come with investing directly in drug-makers. From a valuation standpoint, sales of recent top-tier assets have commanded EBITDA multiples in the mid-teens to 20x.
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