Scoop: Novo buys Medical Knowledge Group for a valuation of $1.15 billion

Novo Holdings won the bid for Medical Knowledge Group, which provides marketing services to pharmaceutical companies, with an enterprise value of $1.15 billion, four sources told Axios.

Why is this important: The drug therapies developed today are increasingly aimed at smaller patient populations, which can complicate commercialization. If you have a real data analytics company like MKG, or a tech-based strategy, investors have no problem paying a premium.

  • Everything MKG does is aimed at healthcare professionals, whereas many other medical communication platforms are consumer-centric.

Inside the agreement: Novo’s offer values ​​MKG at around 20.5x 2021 EBITDA, putting it in the range of 17x to 22x EBITDA that similar assets ordered last year.

  • The current owner of MKG is private equity firm Court Square, which was advised by Harris Williams, and the sale process is said to have been competitive.
  • Court Square would have bought MKG from WindRose Health Investors just two years ago for an enterprise value of approximately $330 million, or 13 times EBITDA.
  • Novo, which invests through its US arm Principal Investments, is now the fifth private equity fund to back veteran CEO Leon Bahar. This sets it apart from many recent medical communications deals that have involved founders backed by institutional capital for the first time.

Novo and Court Square declined to comment.

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Donald E. Patel