CPHI Conclusion

This month, Todd Bokus, Robert Stanley and I attended CPHI Frankfurt, a prominent event in the Pharma Services space. Below are my key takeaways from the event:

Attendance

Attendance by private equity and strategic companies was very strong. It’s clear that folks are making the effort to meet in person at large events like this. Exhibitors were extremely well represented as 10 to 12 of the Exhibition Halls were maxed out.

The Global Macroeconomic Environment

During our meetings, we noticed there was incredible interest in receiving Bourne’s perspective on the global macroeconomic environment considering factors like the inflationary environment, rising rates, the war in Ukraine, Covid in China, etc. We were able to reassure folks that Pharma Services is a great place to be and beneficiary of the “flight to quality” over the last few months and will be following up with a comprehensive Capital Markets report next week.

Despite multiples compressing of late:

1.??????Valuations are still above historical averages

2.??????There is an incredible amount of dry powder on the sidelines from both Private Equity and Strategic companies

3.??????There are numerous other tailwinds, namely the trend toward outsourcing and onshoring in the United States and Europe, sustaining the industry

We also noticed that larger leveraged buyout transactions are becoming challenging as the credit markets have contracted significantly, and that access to talent and labor and supply chain issues remain two of the largest concerns.

Conclusion

Our team thoroughly enjoyed the opportunity to connect with industry leaders in a beautiful city and continue to strengthen our relationships at CPHI Frankfurt. Bourne Partners will be attending all major upcoming industry conferences and looks forward to meeting with management teams in attendance to continue the dialogue. See our events page for details and contact information.