Finding new capital partners
The stories behind the acquisitions
While consolidating the industry may not have been the goal of independent IRBs, the number of small and family owned IRBs continues to shrink.
Western IRB, Copernicus Group IRB, and IRBNet are all under the ownership of Arsenal Capital Partners. Aspire IRB, Midlands IRB and New England IRB are owned by the WIRB-Copernicus Group (WCG). Just before this issue went to press, WCG announced the acquisition of New England IRB in Boston. Schulman Associates IRB in Cincinnati was sold to Imperial Capital Group in 2008. Audax Private Equity owns a majority stake in Chesapeake IRB, and just this year completed acquisitions of Cincinnati-based Goodwyn IRB and IRB Services in Canada.
When former Schulman Associates IRB CEO John Isidor, JD, and his partner decided to sell Schulman in 2008, they weren’t necessarily looking to private equity firms. "Certain types of organizations [such as patient recruitment] were conflicted out of that process," he explains. "One IRB was interested, but it was mainly private equity firms. They had more of a neutral interest. We were pretty large, so it wasn’t like another IRB would buy us."
Finding a partner with shared values and commitment to human subjects protection is key, says Felix Khin-Maung-Gyi, PharmD, MBA, CIP, RAC, founder of Chesapeake IRB and Executive Chairman of Chesapeake Research Review, LLC, in Columbia, MD.
"There has to be evidence of dedication to human research protections in an ethical way," he says. "We have to have shared values and demonstration of those values by having transparent and efficient infrastructure and procedures in place. Of course, a group that has growth potential is what attracts any buyer."
Several of the IRBs acquired by the firms have carried on with management structures and day-to-day operations intact. For example, Audax stays out of the daily operations of Chesapeake IRB, Gyi says.
"We have a tremendous partner in Audax. They leave the existing management structure intact and let the people who are growing the business do so and offer support and access to dollar and non-dollar resources as needed," he says. "They stay out of the way of the IRB’s day-to-day business."
WIRB-Copernicus Group (WCG) and its member IRBs operate as separate entities, each with its own management structure. "We give them the resources, capital, technology, and support they need to flourish," says Don Deieso, PhD, chairman and CEO of WCG. "We haven’t touched anything at WIRB, Copernicus, Aspire, or Midlands. One of the things we feel strongly about is that we don’t acquire and then tear things apart. Nothing has essentially changed except they have access to the systems we’re offering them." n