Case 1:21-cv-04467 Document 1 Filed 05/18/21 Page 1 of 21
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`MICHAEL BIRDSALL,
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`Case No.: _________________
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`COMPLAINT
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`DEMAND FOR JURY TRIAL
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`PRA HEALTH SCIENCES INC., COLIN
`SHANNON, JEFFREY T. BARBER,
`ALEXANDER G. DICKINSON, LINDA S.
`GRAIS, JAMES C. MOMTAZEE, GLEN D.
`STETTIN, and MATTHEW P. YOUNG,
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`-against-
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`Plaintiff,
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`Defendants.
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`COMPLAINT FOR VIOLATION OF THE SECURITIES EXCHANGE ACT OF 1934
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`Plaintiff, Michael Birdsall, by Plaintiff’s undersigned attorneys, for this complaint against
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`Defendants, alleges upon personal knowledge with respect to Plaintiff, and upon information and
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`belief based upon, inter alia, the investigation of counsel, as to all other allegations herein, as
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`follows:
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`NATURE OF THE ACTION
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`1.
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`This is an action brought by Plaintiff against PRA Health Sciences, Inc. (“PRA” or the
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`“Company”) and the members of the Company’s board of directors (collectively referred to as the
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`“Board” or the “Individual Defendants” and, together with the Company, the “Defendants”) for their
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`violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”), 15
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`U.S.C. §§ 78n(a), 78t(a) respectively, and United States Securities and Exchange Commission
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`(“SEC”) Rule 14a-9, 17 C.F.R. § 240.14a-9. Plaintiff’s claims arise in connection with the proposed
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`acquisition of PRA by ICON plc (“ICON”).
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`2.
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`On February 24, 2021, PRA and ICON entered into an agreement and plan of merger
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`Case 1:21-cv-04467 Document 1 Filed 05/18/21 Page 2 of 21
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`(the “Merger Agreement”), pursuant to which PRA will merge with and into ICON, with ICON
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`continuing as the surviving company (the “Proposed Transaction”).
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`3.
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`Pursuant to the terms of the Merger Agreement, PRA’s common stock shareholders
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`will be entitled to receive $80.00 in cash (the “Cash Consideration”) and 0.4125 shares of ICON stock
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`(the “Exchange Ratio” and, together with the Cash Consideration, the “Merger Consideration”) for
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`each share of PRA common stock that they own. Based on ICON’s price as of February 23, 2021,
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`the last trading day before the public announcement of the signing of the Merger Agreement, the
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`Merger Consideration was worth approximately $166.06 per share of PRA common stock.
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`4.
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`On or about April 28, 2021, in order to convince PRA’s public common stockholders
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`to vote in favor of the Proposed Transaction, the Defendants authorized the filing of a materially
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`incomplete and misleading Definitive Proxy Statement (the “Proxy”) with the SEC, in violation of
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`Sections 14(a) and 20(a) of the Exchange Act.
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`5.
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`In particular, the Proxy contains materially incomplete and misleading information
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`concerning the background of the Proposed Transaction and the valuation analyses performed by
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`PRA’s financial advisors, BofA Securities, Inc. (“BofA Securities”) and UBS Securities LLC (“UBS”
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`and together with BofA Securities, the “Financial Advisors”) regarding the Proposed Transaction.
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`6.
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`The Proposed Transaction is expected to close in July of 2021 and the special meeting
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`of the Company’s shareholders to vote on the Proposed Transaction is scheduled for June 15, 2021.
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`Therefore, it is imperative that the material information that has been omitted from the Proxy is
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`disclosed prior to the special meeting, so Plaintiff can properly exercise all corporate voting rights.
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`7.
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`For these reasons, and as set forth in detail herein, Plaintiff asserts claims against
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`Defendants for violations of Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9. Plaintiff
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`seeks to enjoin Defendants from taking any steps to consummate the Proposed Transaction unless and
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`until the material information discussed below is disclosed to PRA’s public common stockholders
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`Case 1:21-cv-04467 Document 1 Filed 05/18/21 Page 3 of 21
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`sufficiently in advance of the upcoming shareholder vote or, in the event the Proposed Transaction is
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`consummated, to recover damages resulting from the Defendants’ violations of the Exchange Act.
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`JURISDICTION AND VENUE
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`8.
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`This Court has jurisdiction over all claims asserted herein pursuant to Section 27 of
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`the 1934 Act because the claims asserted herein arise under Sections 14(a) and 20(a) of the 1934 Act
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`and Rule 14a-9.
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`9.
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`Personal jurisdiction exists over each Defendant either because the Defendant
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`conducts business in or maintains operations in this District, or is an individual who is either present
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`in this District for jurisdictional purposes or has sufficient minimum contacts with this District as to
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`render the exercise of jurisdiction over each Defendant by this Court permissible under the traditional
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`notions of fair play and substantial justice. “Where a federal statute such as Section 27 of the
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`[Exchange] Act confers nationwide service of process, the question becomes whether the party has
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`sufficient contacts with the United States, not any particular state.” Sec. Inv’r Prot. Corp. v. Vigman,
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`764 F.2d 1309, 1315 (9th Cir. 1985). “[S]o long as a defendant has minimum contacts with the
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`United States, Section 27 of the Act confers personal jurisdiction over the defendant in any federal
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`district court.” Id. at 1316.
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`10.
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`Venue is proper in this District under Section 27 of the Exchange Act, 15 U.S.C. §
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`78aa, as well as 28 U.S.C. § 1391, because Defendants are found or are inhabitants or transact
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`business in this District. Indeed, PRA’s common stock trades on the Nasdaq Global Select Market
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`(“Nasdaq”), which is headquartered in this District. See, e.g., United States v. Svoboda, 347 F.3d
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`471, 484 n.13 (2d Cir. 2003) (collecting cases).
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`PARTIES
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`11. Plaintiff is, and has been continuously throughout all times relevant hereto, the owner
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`of PRA common stock.
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`Case 1:21-cv-04467 Document 1 Filed 05/18/21 Page 4 of 21
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`12. Defendant PRA is a Delaware corporation with its principal offices located at 4130
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`ParkLake Avenue, Suite 400, Raleigh, North Carolina 27612. PRA is one of the world’s leading
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`global contract research organizations by revenue, providing outsourced clinical development and
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`data solution services to the biotechnology and pharmaceutical industries, with a global clinical
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`development platform that includes more than 75 offices across North America, Europe, Asia, Latin
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`America, Africa, Australia, and the Middle East, and with more than 19,000 employees worldwide.
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`PRA’s common stock trades on the Nasdaq under the ticker symbol “PRAH.”
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`13. Defendant Colin Shannon (“Shannon”) is, and has been at all relevant times, the
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`Company’s Chief Executive Officer and Chairman of the Board of Directors of the Company.
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`14. Defendant Jeffrey T. Barber (“Barber”) is, and has been at all relevant times, a
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`director of the Company.
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`15. Defendant Alexander G. Dickinson (“Dickinson”) is, and has been at all relevant
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`times, a director of the Company.
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`16. Defendant Linda S. Grais (“Grais”) is, and has been at all relevant times, a director
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`of the Company.
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`17. Defendant James C. Momtazee (“Momtazee”) is, and has been at all relevant times,
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`a director of the Company.
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`18. Defendant Glen D. Stettin (“Stettin”) is, and has been at all relevant times, a director
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`of the Company.
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`19. Defendant Matthew P. Young (“Young”) is, and has been at all relevant times, a
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`director of the Company.
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`20. The Defendants identified in paragraphs 13 through 19 are collectively referred to
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`herein as the “Board” or the “Individual Defendants,” and together with the Company, the
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`“Defendants.”
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`Case 1:21-cv-04467 Document 1 Filed 05/18/21 Page 5 of 21
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`SUBSTANTIVE ALLEGATIONS
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`I.
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`Background of the Company and the Proposed Transaction
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`21. Defendant PRA is a Delaware corporation with its principal offices located at 4130
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`ParkLake Avenue, Suite 400, Raleigh, North Carolina 27612. PRA is one of the world’s leading
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`global contract research organizations by revenue, providing outsourced clinical development and
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`data solution services to the biotechnology and pharmaceutical industries, with a global clinical
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`development platform that includes more than 75 offices across North America, Europe, Asia, Latin
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`America, Africa, Australia, and the Middle East, and with more than 19,000 employees worldwide.
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`PRA’s common stock trades on the Nasdaq under the ticker symbol “PRAH.”
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`22. PRA is organized into two reportable segments: Clinical Research and Data
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`Solutions. PRA’s Clinical Research segment encompasses a broad array of services across the
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`spectrum of clinical development programs and its Data Solutions segment provides data, analytics,
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`technology, and consulting solutions to the life sciences market. The Clinical Research and Data
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`Solutions segments complement each other, and provide enhanced value to PRA’s clients when
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`delivered together, with each driving demand for the other.
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`23. During the past few years, PRA has continued to execute a growth strategy that has
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`resulted in PRA’s strong reputation as a strategic partner of choice for biotechnology and small- to
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`mid-sized pharmaceutical companies., which rely on full-service contract research organizations like
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`PRA to deliver fast, effective, and thorough support throughout the clinical development and
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`regulatory processes because they generally lack a global clinical development infrastructure. PRA
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`has leveraged its strong reputation and existing relationships with biotechnology and pharmaceutical
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`companies to capture their additional business, and is well-positioned to take advantage of the
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`strategic alliances with CROs that will be increasingly utilized by small- and mid-sized
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`pharmaceutical companies over the next several years given the depth of PRA’s relationships and
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`Case 1:21-cv-04467 Document 1 Filed 05/18/21 Page 6 of 21
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`proven track record.
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`24. Thus, as PRA continues to execute its growth strategies, it has positioned itself for
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`continued, sustained economic growth in the coming years.
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`25.
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`Indeed, along with the financial results that PRA released on November 4, 2020, just
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`a few months before the Proposed Transaction was announced, PRA issued a press release entitled
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`PRA Health Sciences, Inc. Reports Third Quarter 2020 Results and Updates Full Year 2020
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`Guidance, which reaffirmed its current strategies, stating in part:
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`“I am very appreciative of the effort and focus of all of our employees despite the difficult
`health circumstances in the world today. As a result of this commitment, I am very pleased
`to report revenue and earnings that were significantly better than the guidance we
`provided in August and an increase to our 2020 guidance. I am also happy to report
`another quarter of record level gross and net new business awards," said Colin Shannon,
`PRA's President and Chief Executive Officer. "Although we continue to experience
`challenges with the pandemic, we believe we will finish 2020 strong and are well-
`positioned for 2021.”
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`26. Thus, the Proposed Transaction comes at a time when PRA’s future success was not
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`fully reflected by its share price. The Proposed Transaction will “compensate” PRA’s public
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`stockholders with Merger Consideration that fails to adequately compensate them for the intrinsic
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`value of their shares.
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`27. Despite PRA’s intrinsic value and growth prospects, the Individual Defendants are
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`agreeing to a merger that deprives PRA public shareholders of the ability to partake in the Company’s
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`individual growth and instead cashes them out in part and dilutes the value of their shares with an
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`inadequate interest in ICON. The Individual Defendants breached their fiduciary duties owed to
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`PRA’s shareholders by agreeing to the Proposed Transaction for the unfair Merger Consideration,
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`and by allowing the unfair and flawed sales process to unfold in the manner that it did, which will
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`cause Plaintiff and the Class to receive an inadequate Merger Consideration while Company insiders
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`receive millions of dollars in severance payments and accelerated vesting of their restricted stock
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`units.
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`Case 1:21-cv-04467 Document 1 Filed 05/18/21 Page 7 of 21
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`II.
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`The Announcement of the Proposed Transaction
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`28. On February 24, 2021, ICON and PRA issued a joint press release to announce the
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`Proposed Transaction, which stated in part:
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`ICON TO ACQUIRE PRA HEALTH SCIENCS, CREATING A WORLD LEADER
`IN HEALTHCARE INTELLIGENCE AND CLINICAL RESEARCH
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`•
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`• The consolidation brings together two organizations with a history of robust growth and
`performance ready to build on this strength using the outstanding talent of both companies to
`deliver enhanced value to patients, customers, employees and shareholders.
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`• All customers will benefit from increased functional, geographical and therapeutic scale as
`well as expansive healthcare technology innovation.
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`• The combination will address the growing market need for de-centralised and hybrid trial
`solutions from a differentiated combination of mobile and connected health platforms, a
`global site network, home health service and wearables expertise.
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`• The combined business will be no. 1 or 2 in key clinical market segments and have formal
`strategic partnerships with a majority of the top 20 biopharma companies, providing a
`platform for growth and innovation.
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`• Significant shareholder value creation expected as a result of strong industry momentum and
`leveraging best practice operating models, revenue, cost and tax synergies.
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` ICON and PRA to host conference call at 8:30 a.m. EST 24th February.
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`DUBLIN—(BUSINESS WIRE)—Feb. 24, 2021—ICON plc, (NASDAQ: ICLR), a global
`provider of outsourced drug and device development and commercialisation services to the
`pharmaceutical, biotechnology and medical device industries, and government and public
`health organisations, today announced it has entered into a definitive agreement to acquire
`PRA Health Sciences, Inc. (NASDAQ: PRAH) in a cash and stock transaction valued at
`approximately $12 billion, with the per share merger consideration consisting of $80 in cash
`and 0.4125 shares of ICON stock. The consideration represents an approximately 30%
`23rd,
`2021.
`premium
`to
`PRA’s
`closing
`price
`as
`of
`February
`
`the
`features multimedia. View
`release
`press
`This
`https://www.businesswire.com/news/home/20210224005484/en/
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`The transaction brings together two high-quality, innovative and growing organisations with
`similar cultures and a shared focus on high quality and efficient clinical trial execution from
`Phase 1 to post-approval studies.
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`Biopharma and medical device customers of all sizes will benefit from broader service
`offerings and geographic footprint, deeper therapeutic expertise, expansive healthcare
`technology innovation, and functional talent and capabilities. PRA’s mobile and connected
`7
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`full
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`release
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`here:
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`Case 1:21-cv-04467 Document 1 Filed 05/18/21 Page 8 of 21
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`health platforms and real world data and information solutions together with ICON’s
`Accellacare site network, home health services and wearables expertise, will be combined to
`deliver differentiated decentralised and hybrid trial solutions to meet growing customer needs.
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`The transaction is anticipated to be highly accretive delivering double-digit accretion in the
`first full year and growing to 20%+ thereafter, driven by growth momentum, estimated annual
`run-rate cost synergies of $150 million, and the combined effective tax rate decreasing to
`14%,
`both
`to
`be
`realised
`in
`approximately
`4
`years.
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`Dr. Steve Cutler, Chief Executive Officer, ICON plc, said:
`“The combined company will create a new paradigm for accelerating clinical research and
`bringing new medicines and devices to market. Both ICON and PRA have track records of
`robust growth and performance and we are ready to build on this unrivalled position of
`strength, utilising the outstanding talent in both organisations. With broader and deeper
`operational scale combined with innovative technology and real world data solutions, we will
`enable all customers to reduce their development time and cost. We will be the leading
`provider of de-centralised and hybrid trial solutions through the integration of our data
`capabilities, health platforms and Accellacare site network. The transaction will be highly
`accretive
`from
`full
`year
`1
`post-close.”
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`Colin Shannon, Chairman and Chief Executive Officer, PRA Health Sciences, said:
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`“I joined PRA 13 years ago to help build a company that would make a difference in the world
`and transform the way we developed new medicines. The way we do it now takes far too long
`and costs far too much. Critically ill patients can’t wait for cures. Underserved populations
`can’t wait for access. Every day counts. COVID-19 created a platform for change that we
`cannot ignore. The pandemic accelerated the adoption of mobile health technologies and
`healthcare intelligence tools – tools that PRA helped develop – at an unprecedented rate. The
`union of PRA and ICON will create an organization that has the people, data and technology
`to bring those cures to patients faster and more efficiently than ever before. We are thrilled
`to be joining with ICON, a company with a similar culture and values. I’m deeply indebted to
`PRA’s 19,000 talented employees who have helped us bring this vision closer to reality. We
`stand
`together
`now
`because
`patients
`can’t
`wait.”
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`TRANSACTION
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`Under the terms of the transaction, PRA shareholders will receive per share, $80 in cash and
`0.4125 shares of ICON stock. Upon completion of the transaction, PRA shareholders will own
`approximately 34 percent of the shares of the combined company and ICON shareholders will
`own
`approximately
`66
`percent.
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`MANAGEMENT,
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`The combined company will be headquartered in Dublin, Ireland. Dr. Steve Cutler, Chief
`Executive Officer of ICON plc, will serve as Chief Executive Officer of the combined
`company and Brendan Brennan, Chief Financial Officer of ICON plc, will serve as Chief
`Financial Officer. Ciaran Murray will serve as the Chairman of the Board of Directors.
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`DETAILS
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`HEADQUARTERS
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`GOVERNANCE
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`AND
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`Case 1:21-cv-04467 Document 1 Filed 05/18/21 Page 9 of 21
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`Current PRA Chairman and Chief Executive Officer, Colin Shannon will join the board post
`the closing of the transaction along with one additional board member from PRA.
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`FINANCING, CLOSING AND APPROVALS
`ICON intends to fund the cash portion of the transaction consideration through a combination
`of cash on hand and fully committed debt financing from Citi. The transaction is not subject
`to a financing condition.
`The transaction has been unanimously approved by both Boards of Directors and is
`anticipated to close during quarter three of 2021, subject to regulatory and shareholder
`approvals and customary closing conditions. Until closing, PRA and ICON remain separate
`and independent companies.
`ADVISORS
`Centerview Partners is acting as lead financial advisor with Citi providing additional financial
`advisory services, and Cahill Gordon & Reindel serving as legal counsel to ICON plc. BofA
`and UBS Investment Bank are acting as financial advisors, and Paul Weiss serving as legal
`counsel to PRA Health Sciences.
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`The Preclusive Deal Protection Devices
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`
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`III.
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`29. To the detriment of the Company’s public shareholders, the Individual Defendants
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`agreed, in the Merger Agreement, to certain onerous and preclusive deal protection devices that
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`operate conjunctively to make the Proposed Transaction a fait accompli and all but ensure that the
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`Proposed Transaction is consummated and that no competing offers emerge for the Company.
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`30. The Merger Agreement contains restrictive “no-shop” provisions that prohibit the
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`members of the Board from soliciting proposals relating to alternative offers or business
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`combinations.
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`31. The “no-shop” provisions strictly prohibit, except under extremely limited
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`circumstances, the Individual Defendants from engaging in discussions or negotiations relating to
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`proposals regarding alternative acquisitions or business combinations
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`32. Among other things, the “no-shop” provisions also require the Board to provide
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`ICON with written notice of any Takeover Proposal, and further requires that the Board provide prior
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`written notice of its intention to terminate the Merger Agreement due to receipt of a Superior
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`Proposal so that ICON may negotiate with PRA following ICON’s receipt of the notice and ICON
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`can adjust the terms and conditions of the Merger Agreement so that the Takeover Proposal ceases
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`Case 1:21-cv-04467 Document 1 Filed 05/18/21 Page 10 of 21
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`to be a Superior Proposal.
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`33.
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`In addition, the Merger Agreement provides that the Company will be required to pay
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`to ICON a termination fee of $277,000,000.00 with respect to any termination under the no-shop
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`provisions of the Merger Agreement.
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`34.
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`Ultimately, these preclusive deal protection devices restrained and continue to
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`restrain the Company's ability to solicit or engage in negotiations with any third party regarding a
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`proposal to acquire all or a significant interest in the Company, and further restrain the Company’s
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`public shareholders’ ability to disapprove the Proposed Transaction.
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`35.
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`Indeed, the Proposed Transaction was negotiated through a flawed and conflicted
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`sales process pursuant to which PRA conducted insufficient outreach and steered the transaction to
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`ICON by accelerating the merger process and negotiating the merger during the coronavirus
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`pandemic.
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`36. The aggregate effect of the preclusive deal protection devices, viewed in light of the
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`materially inadequate consideration offered for the Company’s shares in the Proposed Transaction
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`and the flawed and conflicted sales process pursuant to which the Proposed Transaction was
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`negotiated, supports an inference that the Board was not acting in good faith in approving the terms
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`of the Merger Agreement.
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`37. Accordingly, Plaintiff seeks injunctive and other equitable relief to prevent the
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`irreparable injury that the Company’s shareholders will continue to suffer absent judicial
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`intervention.
`
`IV.
`
`The Proxy Omits Material Information
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`38.
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`On or about April 28, 2021, in order to convince PRA’s public common stockholders
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`to vote in favor of the Proposed Transaction, the Defendants authorized the filing of the materially
`
`incomplete and misleading Proxy with the SEC, in violation of Sections 14(a) and 20(a) of the
`
`Exchange Act.
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`Case 1:21-cv-04467 Document 1 Filed 05/18/21 Page 11 of 21
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`39. The special meeting of PRA’s shareholders to vote on the Proposed Transaction is
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`forthcoming. The Individual Defendants were obligated to carefully review the Proxy before it was
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`filed with the SEC and disseminated to the Company’s shareholders to ensure that it did not contain
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`any material misrepresentations or omissions. However, the Proxy misrepresents or omits material
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`information that is necessary for the Company’s shareholders to make an informed voting decision
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`in connection with the Proposed Transaction.
`
`40. Specifically, the Proxy omits two types of material information: (i) information
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`regarding the background of the transaction, and (ii) information that renders the Company’s
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`Financial Advisors’ fairness analysis materially false, misleading, or incomplete.
`
`A.
`
`The Proxy Omits Material Information Regarding the Background of the
`Transaction
`
`41. The Proxy states that PRA entered into a letter of intent with Company A, setting
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`
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`forth preliminary terms for Company A’s acquisition of a PRA business unit, that Company A
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`conducted “extensive due diligence” in connection with the letter of intent, and that discussions of a
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`potential transaction with Company A occurred began around October 15, 2020 and concluded
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`around January 21, 2021 because of “fundamental differences with respect to key commercial and
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`other material terms,” but fails to disclose (i) the nature of the “key commercial and other material
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`terms” and the “fundamental differences” between PRA and Company A, and (ii) whether PRA
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`entered into a standstill agreement with Company A and, if so, whether standstill obligations are
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`ongoing and are subject to a “Don’t Ask, Don’t Waive” (“DADW”) provision, which would
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`effectively render the “fiduciary out” clause for the no-shop provisions illusory because it would
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`prevent Company A from making a Superior Proposal to acquire PRA. See Koehler v. NetSpend
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`Holdings, Inc., C.A. No. 8373-VCG, 2013 Del. Ch. LEXIS 131, at *71-72 (Del. Ch. Ct. May 21,
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`2013).
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`
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`B.
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` The Proxy Omits Material Information Regarding the Fairness Analysis
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`Case 1:21-cv-04467 Document 1 Filed 05/18/21 Page 12 of 21
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`42. The Proxy also omits material information regarding the Company’s Financial
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`Advisors’ Fairness Opinion and the various valuation analyses that the Company’s Financial
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`Advisors performed to render the opinion but fails to provide enough information regarding the
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`necessary data, support for conclusions, or the existence of, or basis for, the underlying assumptions
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`that underpin the fairness opinion. Specifically, the Proxy does not disclose enough information
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`regarding the financial projections, inputs and assumptions for various financial valuations. Without
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`this information, shareholders cannot replicate the analyses, confirm the valuations, evaluate the
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`Financial Advisors’ opinion that the Merger Consideration is fair, or accurately assess the reliability
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`of the Fairness Opinion. The informative value of the Fairness Opinion is not in its conclusions, but
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`in the valuation analyses that support them. Thus, the key inputs, which are intrinsically baked into
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`those conclusions, must also be fairly disclosed.
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`43. With respect to the PRA Management Projections beginning on Page 110, the Proxy
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`fails to disclose the line-items used to derive the Unlevered Free Cash Flow projections, including
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`(i) Operating expenses, (ii) Depreciation and amortization, (iii) Interest, (iv) Taxes (or tax rate), (v)
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`Changes in net working capital, (vi) stock-based compensation expense, (vii) Capital expenditures,
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`and (viii) Any other line-items used to derive Unlevered Free Cash Flow.
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`44. Further, with respect to the “ICON-Adjusted PRA Forecasts,” the Proxy fails to
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`disclose (i) the full rationale and basis for including a set of projections that includes “adjustments”
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`to PRA Management’s Projections, including (ii) who at PRA management “discussed” these
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`“adjustments” with ICON, (iii) the timing and substance of such discussions, (iv) why PRA
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`management authorized ICON to make “adjustments” to its own projections, and (v) whether the
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`original PRA projections in fact continue to represent management’s best guess for the Company’s
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`future financial results notwithstanding the “adjustments.”
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`45. With respect to BofA Securities’ Selected Publicly Traded Companies Analysis
`
`
`
`12
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`Case 1:21-cv-04467 Document 1 Filed 05/18/21 Page 13 of 21
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`beginning on Page 91 and Page 94, the Proxy fails to disclose: (i) the objective criteria, if any, that
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`BofA Securities relied upon in selecting the companies for the analysis, (iii) the individual multiples
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`for each of the selected companies, (iii) BofA Securities’ full rationale and basis for valuing PRA
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`and ICON based on a range of EV/EBITDA (SBC-Unburdened) multiples of 14.0x to 17.5x for PRA
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`and 15.5x to 18.0x for ICON for the 2021 calendar year, and 12.5x to 16.0x for PRA and 14.0x to
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`16.5x for ICON for the 2022 calendar year, and (iv) BofA Securities’ full rationale and basis for
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`valuing PRA and ICON based on a range of Price/EPS (SBC/Amort.-Unburdened) multiples of
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`18.0x to 25.0x for PRA and 20.0x to 26.0x for ICON for the 2021 calendar year, and 15.5x to 22.0x
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`for PRA and 17.0x to 22.5x for ICON for the 2022 calendar year.
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`46. With respect to BofA Securities’ Selected Transactions Analysis beginning on Page
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`92, the Proxy fails to disclose: (i) the objective criteria that BofA Securities relied upon in selecting
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`the transactions analyzed, including the enterprise values in each transaction, (ii) whether each
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`transaction contemplated cash consideration, stock consideration, or a cash/stock mix, and (iii) BofA
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`Securities’ full rationale and basis for selecting a range of EBITDA (SBC-Unburdened) multiples of
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`12.0x to 14.0x and 11.0x to 13.0x for the 2020 and 2021 years, respectively, including which (if any)
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`of the selected precedent transactions were deemed most similar to the Proposed Transaction and
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`how BofA Securities accounted for the fact that the multiples in the other transactions were not
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`affected by the Covid-19 pandemic.
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`47. With respect to BofA Securities’ Discounted Cash Flow Analysis (“DCF”) beginning
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`on Pages 93 and 95, the Proxy fails to disclose: (i) the full rationale and basis for selecting a discount
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`rate range of 7.5% to 10.0% for PRA and 7.25% to 9.5% for ICON, including the actual inputs that
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`were used for each of PRA and ICON, (ii) the terminal values and BofA Securities’ full rationale
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`and basis for selecting a range of terminal year EBITDA (SBC-Unburdened) multiples of 13.0x to
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`16.5x for PRA and 13.0x to 17.5x for ICON, and (iii) a full sensitivity table based on the entire range
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`13
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`Case 1:21-cv-04467 Document 1 Filed 05/18/21 Page 14 of 21
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`of discount rates and multiples. Without this information, it is impossible to determine whether the
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`discounted cash flow analysis actually provides a reasonable range for the Company’s intrinsic value
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`because a banker can make any transaction appear “fair” simply by changing the inputs and
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`assumptions to project and discount future cash flows below the present value of the merger
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`consideration.
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`48. With respect to the Miscellaneous disclosures on Page 96, the Proxy states that BofA
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`Securities has performed certain corporate and/or investment banking services for PRA during the
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`two-year period leading up to January 31, 2021 and received $4 million for these financial services
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`but fails to (i) clearly disclose whether BofA Securities has actually provided financial services to
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`ICON and, if so, (ii) identify the services BofA Securities has provided to ICON and (iii) disclose
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`the amount of compensation that BofA Securities has received from ICON in connection with these
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`services.
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`49. With respect to UBS’ Selected Public Company Analysis beginning on Page 100, the
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`Proxy fails to disclose: (i) the objective criteria, if any, that UBS relied upon in selecting the
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`companies for the analysis, and (ii) UBS’ full rationale and basis for valuing PRA and ICON based
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`on a range of Adjusted EBITDA multiples of 16.5x to 17.5x for PRA and 16.5x to 17.5x for ICON
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`for the 2021 calendar year, and 15.0x to 16.0x for PRA and 15.0x to 16.0x for ICON for the 2022
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`calendar year.
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`50. With respect to UBS’ Selected Transactions Analysis beginning on Page 101, the
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`Proxy fails to disclose: (i) the objective criteria that UBS Securities relied upon in selecting the
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`transactions analyzed, including the enterprise values in each transaction, (ii) whether each
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`transaction contemplated cash consideration, stock consideration, or a cash/stock mix, and (iii) UBS’
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`full rationale and basis for selecting a range of Adjusted EBITDA) multiples of 12.5x to 14.5x and
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`12.0x to 13.5x for the 2020 and 2021 years, respectively, including which (if any) of the selected
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`Case 1:21-cv-04467 Document 1 Filed 05/18/21 Page 15 of 21
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`precedent transactions were deemed most similar to the Proposed Transaction and how UBS
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`accounted for the fact that the multiples in the other transactions were not affected by the Covid-19
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`pandemic.
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`51. With respect to UBS’ Discounted Cash Flow Analysis beginning on Page 102 and
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`Page 105, the Proxy fails to disclose: (i) the full rationale and basis for selecting a discount rate range
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`of 9.00% to 10.00% for PRA and ICON, including the actual inputs that were used for each of PRA
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`and ICON, (ii) the terminal values and UBS’ full rationale and basis for selecting a range of terminal
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`year Adjusted EBITDA multiples of 15.0x to 16.0x for PRA and ICON, and (iii) a full sensitivity
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`table ba