Executives: Ronnie Speight - VP, IR Alistair Macdonald - CEO Michael Bell - CEO, inVentiv Health Greg Rush -

CFO
Analysts: Robert Jones - Goldman Sachs Erin Wright - Credit Suisse John Kreger - William Blair Tycho Peterson - JP Morgan Eric Coldwell - Baird Tim Evans - Wells Fargo Sandy Draper - SunTrust Donald Hooker -

KeyBanc
Operator: Good morning, ladies and gentlemen. Welcome to today’s conference call and webcast announcing that INC Research and inVentiv Health are merging, creating a leading global biopharma solutions organization. Our call will also include a brief update on INC Research’s first quarter results. At this time, all participants are currently in a listen-only-mode. Following the presentation, we will take questions from the analyst community and instructions will follow at that time.

I like to hand the conference over to Ronnie Speight, Vice President of Investor Relations. Please go ahead, sir.

Ronnie Speight: Good morning and thank you for taking the time to join our call. With me on the call today are Alistair Macdonald, Chief Executive Officer of INC Research; Mike Bell, Chief Executive Officer of inVentiv Health, and Greg Rush, Chief Financial Officer of INC Research. As a reminder, this call is being recorded and a press release and slide presentation regarding today's announcement are available on each company’s website, along with a supplemental presentation on inVentiv Health.

In addition, a separate presentation regarding INC Research’s first quarter 2017 results is available on the INC Research website. An archived replay of the conference call will be available on the company’s websites at www.incresearch.com and www.inventivhealth.com

after 01:00 PM today. Lastly, an audio replay will be available for the next seven days. We will refer to forward-looking information both in connection with the transaction announced this morning and INC Research’s earnings as defined on slides one and two of the accompanying presentation. Remarks that we make about future expectations, plans, and prospects for INC Research, including those implied by our backlog and pipeline, constitute forward-looking statements for purposes of the Safe Harbor Provisions, under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors. These factors are discussed in the Risk Factors section of our Form 10-K for the year ended December 31, 2016 and our other SEC filings. In addition, any forward-looking statements represent our views as of today and should not be relied upon as representing our views as of any subsequent date. While we might update forward-looking statements at some point in the future, unless legally required we specifically disclaim any obligation to do so. Slide 2 explains the non-GAAP financial measures used by INC Research’s management and its board to evaluate INC Research’s core operating results.

Investors are encouraged to review the reconciliations of the non-GAAP financial measures to their most directly comparable GAAP measures, which are included in the appendix of this presentation. Please refer to the related definitions and disclaimer information on slides one and two in the presentation, as well as the additional information contained in the regulatory filings for both companies. With that, I will turn the call over to Alistair Macdonald, CEO of INC Research. Alistair?

Alistair Macdonald: Thank you, Ronnie, and good morning everyone. We appreciate you joining us for today's call.

This is a very exciting day for INC Research and inVentiv Health. Together we are combining to create a leading global biopharma solutions organization focused on value creation for our pharmaceutical companies, patients, physicians, payers and employees. We believe this merger will create significant benefits and growth opportunities for all stakeholders. We are really excited about the value proposition of a combined INC and inVentiv, which will have deepened scale, scope and therapeutic expertise. Our combined company is purpose built to address new market realities, where clinical and commercial must work together sharing expertise, data and insights all with a goal to accelerate our ability to help customers around the world.

Together we will infuse clinical insights into commercialization and commercial expertise into clinical trials, speeding up the delivery of evidence-based medicines to patients worldwide. Turning to Slide 4, the combination of INC and inVentiv brings together a leading global Phase I to Phase IV contract research organization or CRO with a leading global CRO and contract commercial organization, or CCO. Together we will be the second largest biopharmaceutical outsourcing provider, one of the top three CROs by net revenue and the largest CCO. InVentiv is the first and industry-leading contract commercial organization that delivers comprehensive commercial services, such as selling solutions, communications, consulting and medication adherence. Combined we will offer a comprehensive suite of end to end solutions to support the development and commercialization of biopharmaceutical and biological compounds.

We will have a highly diversified and complementary customer base by combining INC’s strength in small and midsize biopharma with inVentiv’s key relationships with large biopharma. We will have deeper and broader therapeutic expertise, particularly in complex disease areas, increasing our combined capabilities in oncology for both liquid and solid tumors, a strong and diverse CNS offering, and significantly enhanced expertise of cardiovascular, metabolic and respiratory diseases. Turning to Slide 5, the combined company will have the global scale to compete to win in the clinical and commercial markets. Together we will have more than 22,000 employees in 60 countries and will serve customers in more than 110 countries. We will be a large player in Asia-Pacific becoming a top three global CRO in Japan.

A significant number of top 50 biopharma already utilize both clinical and commercial services of the combined company with an attractive opportunity to further penetrate this existing base as well as small to mid-sized biopharma customers. Many of these relationships currently utilize only a small portion of what will be our combined end-to-end solution. The opportunity to broaden and expand these existing relationships and introduce inVentiv’s commercial offering to INC’s strong position with small and midsized customers is substantially. Furthermore, the total addressable outsourcing market is fast, an estimated $60 billion for clinical and $150 billion for commercial. There is significant opportunity for further penetration.

Turning to Slide 6, this is truly a transformational combination for both of our companies, and we are enthusiastic about the significant value creation opportunities for all stakeholders. We will expand our global scale and have capabilities to grow our addressable market as we bring together two innovative and respected players in our industry. Beyond the compelling strategic rationale there are a number of key financial highlights of this transaction that I would like to discuss. We will continue to benefit from inVentiv’s margin expansion story through effective cost management and operational efficiencies, which on an adjusted EBITDA level has enabled an increase from approximately 10% in 2013 to over 16% in 2016. The transaction is estimated to achieve approximately $100 million in identified annual cost synergies, which we expect to be fully realized within three years of closing.

We believe up to an additional $50 million of potential annual cost synergies may be achievable, but have not been included in our accretion estimates. In addition, we believe that our value drivers we have not modeled in that will enhance earnings growth, including additional margin expansion opportunities, significant opportunity for revenue synergies through increased capability cross-selling and scale and the ability to lower the combined company’s effective tax rate. We expect mid-to high single digit accretion to INC’s adjusted EPS in 2018, and accretion of more than 20% in 2019 and beyond. Turning to Slide 7, this is an all stock transaction. Following close, INC’s shareholders are expected to own approximately 53% of the combined company on a fully diluted basis, and inVentiv’s shareholders are expected to own approximately 47% of the combined company.

The transaction values inVentiv Health at an enterprise value of approximately $4.6 billion and the combined company at an enterprise value of $7.4 billion based on the closing price of INC Research common stock of Tuesday, May 9, 2017. The transaction is subject to standard closing conditions, including regulatory and shareholder approvals and expect to close in the second half of 2017. The leadership of the new company will reflect the strengths and capabilities of both INC and inVentiv. Upon closing, Mike Bell, inVentiv’s CEO, will serve as executive chairman of the board of the combined company. He will also have executive oversight of the company’s commercial segment.

I will serve as Chief Executive Officer, and Greg Rush will serve as Chief Financial Officer of the combined company. We will have a 10 member board of directors with five designated by INC including myself. InVentiv will designate the other five directors, including Mike and representatives of Advent International and Thomas H. Lee Partners. We are confident this merger will be seamless for all of our stakeholders, including our customers, employees and shareholders.

Both organizations have extensive integration experience. The combined company will be headquartered in Raleigh, North Carolina with a significant presence in the Northeast corridor, and operations worldwide, including Asia and Europe. Slide 8 shows our combined market position. As we have said previously, together we will create the second-largest biopharmaceutical outsourcing provider with net revenue of $3.2 billion. The combined company will have more than 22,000 employees worldwide and enhanced scale, which will enable us to deliver comprehensive solutions for our customers any need, anywhere, anytime.

As a leading global provider of drug development and commercial solutions, Slide 9 shows the breadth of the combined company's capabilities. Biopharmaceutical companies of all sizes face increasingly complex challenges to bring products to market and are seeking comprehensive outsourced solutions across the clinical and commercial spectrum. Our new company will be built to address new market realities where clinical, real-world evidence and commercial must work together, sharing expertise, data and insights, to improve client performance. We will have leading positions in both the outsourced clinical and commercial services markets. Together we will offer our diverse and highly complementary customer base the most comprehensive suite of outsourced services across the drug development and commercialization lifecycle.

We will also capitalize on the growing commercial outsourcing trend, with specialized knowledge and expertise increasingly required for the successful launch of products. With inVentiv’s CCO, we can enhance the clinical development process with commercial capabilities, including selling solutions, communications, consulting and medication adherence. Slide 10 shows the business mix and customer base of the combined company. One of the things that makes me so excited about this combination is the complementary nature of this transaction from a business, customer and cultural perspective. Based on 2016 combined net revenue clinical will represent approximately two thirds and commercial approximately one third.

INC has strong relationships with many small and midsized biopharmaceutical companies; inVentiv on the other hand has great relationships with large biopharma including the top 20. By combining our complementary customer bases we will have leadership across large, midsize and small biopharma. We will be able to partner with biopharma companies of all sizes and offer best in class point solutions, as well as integrated offerings from clinical development through commercial solutions. Our revenue is well diversified across customer size with a little over half from the top 20 biopharma, slightly less than 20% from 21 to 50, and approximately 30% from small and midsize. Importantly, our two companies have limited client overlap and we see no foreseeable revenue disadvantages that often accompany a merger of this scale.

This merger represents an opportunity to deepen our relationships and expand our share of outsourced clinical development and commercialization spend from across our customer base. On Slide 11, we highlight our combined platform and enhanced data assets and commercial insights. Our combined clinical visibility and therapeutic experience help [inform] customers commercialization efforts. This purpose-built business model allows us to infuse clinical insights into commercialization and commercial insights into clinical trials, speeding up the delivery of evidence-based medicines to patients worldwide. Furthermore, the proprietary data assets and communications capabilities that will result from our combination will enhance the speed and success of site selection and patient recruitment.

At INC we have always had a strategic focus on strong site relationships and improving sustainability of their participation in clinical research trials. We recently ranked as the top CRO to work with among the top ten global CROs. These award-winning site relationships with expedite clinical trials providing a bridge to physician awareness and education. Lastly on this slide, the capabilities we have been building in real world evidence coupled with our market access expertise allows us to bridge the clinical gap and more effectively communicate the benefits to be payers and PBMs. Now I would like to take some time providing a more in-depth overview of the combined global clinical business.

Slide 13 lists several factors that we see as critical for success in navigating the current clinical development market. We believe that combined INC and inVentiv addresses each of these, including critical scale, a strong geographic presence, therapeutic area depth and expertise, delivery model flexibility, an ability to serve clients of all sizes and an understanding of real world market challenges. Moving onto Slide 14, I would like to provide some context around each of these factors. This slide shows both the combined scale and geographic presence in clinical outsourcing. As we have discussed with our investors in the past, scale is increasingly becoming a key consideration for our customers.

This transaction will expand the combined company's global presence. Additionally we will have a greater presence in important strategic geographies such as Asia-Pacific, specifically Japan and China where there is significant opportunity for growth. We will have more than 2500 clinical employees in the Asia-Pac region, including approximately 400 in Japan, where we will be a top three global CRO, approximately 250 in China, and approximately 1200 employees in India providing clinical operations and support services. Simply put, we believe the combined company will be invited to propose on additional clinical development opportunities because of our increased scale. We believe our global reach will enable us to remain a leading outsourcing partner in a market that is increasingly demanding multiple delivery models that span full-service FSP and hybrids.

Turning now to Slide 15, we show how the combined business will deepen our therapeutic expertise across all areas, particularly in complex diseases. Having therapeutic breath and depth is an increasingly important factor in customers’ outsourcing decisions. Both inVentiv and INC have significant therapeutic expertise in core areas, including oncology and CNS with a combined 2016 revenue of over $1.2 billion. This combination also deepens and broadens our capabilities across all therapeutic areas, particularly in cardiovascular, metabolic and respiratory diseases. Additionally, our delivery model flexibility will benefit customers around the world by being able to deliver solutions for all needs, whether full-service, hybrid or FSP, and tailored to onshore, near shore, or offshore.

We will have a leading FSP offering with approximately $500 million of annual revenue including more than $200 million in clinical monitoring and project management. Earlier we showed you the customer mix for both clinical and commercial combined. Looking specifically at clinical on Slide 16, the combination of inVentiv’s existing strength with the top 20 biopharma complements INC’s strength with both small and midsized biopharma where customers ranked 21 to 50. We will have a strong stable revenue base of $1.4 billion from the top 50 companies. We will also be a leader in small and midsized biopharma with approximately $700 million in combined revenue.

This is a segment in which INC has grown awards at a CAGR of approximately 25% since 2012. Our well diversified customer base will allow us to have strong relationships across large, midsized and small biopharma. Offering commercialization solutions to these customers will be a strategic benefit of the transaction. Finally, our combined company will have the proven ability to understand real word market challenges to optimize the clinical development process. And before I turn it over to Mike Bell to discuss the CCO segment, I just want to say how much I have enjoyed working closely with him over the last few months.

We see eye to eye and share a great strategic vision for the combined company. There is no better partner than Mike for this endeavor.

Michael Bell: Thanks Alistair. I and inVentiv have long admired INC and we are very excited about the transaction and bringing these two best in class teams together. And on a personal note it has been a real pleasure to work with world-class executives like you, Alistair, who shares our vision for the industry, and has gotten an organization to do really remarkable things at INC.

InVentiv is the first and leading CCO addressing a large and under-penetrated outsourcing market. The CCO delivers comprehensive commercialization services such as selling solutions, communications, consulting and medication adherence. The CCO market is projected to follow a similar growth path as the CRO market with growth in the high single digits. On this slide we provide an additional overview on the commercial market and recent trends that we are seeing. Biopharma sales and marketing budgets are significant, at least 10% greater than R&D budgets of large biopharma.

We are also seeing an accelerating shift towards specialty and more complex therapies that require more sophisticated and integrated sales and marketing expertise. Our commercial relationships at inVentiv have been purpose-built to be strategic and longer duration versus simply tactical and short-term. We believe the combined company will be well positioned to expand and capture increased commercial outsourcing spend by taking these range of services to INC’s current customer base. The CCO market is expected to reach approximately $34 billion by 2020, growing at an approximate 8% compounded annual rate. Based on commercial outsourcing penetration of less than 20% we estimate a potential market of $150 billion, which is significant.

Turning to the next slide, we identify a few of the current operating challenges facing the biopharma industry. These challenges include margin deterioration, reimbursement and access hurdles, relatively low R&D productivity and growing political pressures just to name a few. In general, we expect fewer blockbusters with a shift towards specialty drugs. Existing approaches to confront these challenges have included reducing SG&A expenses, optimizing how to deploy marketing and field assets, refocusing product portfolios around the therapeutic areas in which they have the most depth or presence, and expanding market access and pharmacoeconomic capabilities. We believe that these operating challenges demand new commercial solutions.

We found that integrating our insights across the commercialization process delivers real client value. We think our combined company is best positioned to deliver the solutions that the industry needs. InVentiv is currently the broadest provider of commercialization solutions. With 6400 employees in our commercial businesses supporting more than 75% of the [NMA] approvals in the United States over the last five year period. We organize the CCO into four key service areas on Slide 20; selling solutions, in which we are the number one organization in the United States and top five in Japan.

Our approach is fueled by robust market and data analytics that can include strategy design, recruitment, deployment and end-to-end sales operations. We have launched more than 120 field solutions in the last five years across all major therapeutic areas, which is more than all the top 25 biopharma companies combined. The communications, where we are the largest independent global healthcare agency, InVentiv’s supports clients in healthcare advertising, medical communications, digital marketing and public relations and branding services. In consulting, we supported more than 70 product launches over the past five years. Consulting can include the commercial strategy and planning, pricing and market access, medical affairs advisory and risk and program management.

In medication adherence, where we offer the largest pharmacy network for adherence covering approximately 194 million patients and 2.2 billion prescriptions a year. We leverage a data-driven methodology to help patients stay on their prescribed therapies. We compare inVentiv to a few of our CCO competitors on Slide 21 and the numbers speak for themselves. We are the leading provider of high value commercial solutions, and beyond that we are not just a selling solutions company, we are a strategic, not tactical, solutions provider. We are growing quickly and profitably.

We have the scale and the platform that will enable us to drive consistent growth and deliver the end-to-end capabilities necessary to build upon our leading position in this evolving market. Turning now to Slide 22, in combining the CRO and CCO capabilities we will have expansive data assets to drive insights and improve execution. The transaction combines inVentiv’s pharmacy data to its adherence pharmacy network, real world evidence programs and other data sets that INC’s Real World & Late Phase business, safe relationships and predictive clinical data sets. This will increase the combined company’s access to physicians, investigators, patients and most importantly insights. These are all key factors to inform the design and execution of clinical development and commercialization programs.

Many in our industry have data but what we offer is a differentiated approach to insights. We generate proprietary data everyday from which we garner insights and drive actionable improvements for our customers. Another highlight on a personal note from me this year has been getting Greg Rush. Greg is a very accomplished CFO, and will be the CFO in the new company and his skill and depth is simply remarkable. Greg?

Greg Rush: Thanks Mike.

Before I jump into the details, I wanted to say how exited I am about this combination. It brings together two companies that have a proven track record of double-digit organic revenue, EBITDA and earnings growth. Both of us also have a history of margin expansion, lowering of cost of capital, and tax rate along with numerous successful integrations. We look forward to combining these two companies. Turning to the numbers on Slide 24 we show the value creation of this combination from a financial point-of-view.

Comparing our growth projections for the combined company to a standalone INC looking at performance from 2014 to 2017 and projecting to 2020. Looking at revenue, we expect the combined company to grow revenue at 9% per year. We believe this may impact turn out to be conservative as we've not included any of the many opportunities for revenue synergy in these projections. Importantly while certain combinations within the CRO sector could result in revenue dissynergy, there are no foreseeable revenue dissynergies among our customers. And in fact, we see this combination as an opportunity to expand our share of stand within these customers.

Turning to EBITDA. This combination allows us to repeat the strong EBITDA margin expansion story that we have accomplished through effective cost reductions in operational efficiencies since we went public in 2014 and that inVentiv Health's levered in each of its last three years. A modeling project adjusted EBITDA to grow in the mid-teens driven by inVentiv's margin expansion and realizing the achievable cost synergies that we have identified. This does not reflect additional potential cost synergies in margin enhancement opportunities that I will discuss shortly. The transaction is expected to be accretive to INC's adjusted EPS in 2018 at mid to high single digits and to be accretive by more than 20% in 2019 and beyond.

Before I leave Slide 24, I want to talk briefly about 2017. As I will discuss in more detail later, INC exceeded our guidance for the first quarter on every metric and had record new business wins resulting in a net book-to-bill 1.4. While our first half of 2017 was negatively impacted by cancellations and delays, the second half of 2017 and beyond are setting up nicely deliver above industry growth. With respective to inVentiv, they too experienced an abnormally high level of cancellations within the commercial segment at the end of 2016 and are coming off one of the lowest years of new drug approvals by the FDA with only 22 drug to prove last year. Despite these challenges, FDA approvals are on track to more than double in 2017, with training approvals already year-to-date.

This trend coupled with inVentiv's pipeline sets the foundation for a strong growth in 2018 and beyond. Turning to Slide 25. We provide additional color as to one of the key drivers that makes this merger financially compelling along with opportunity to achieve additional upside to our current expectations. First, we are confident in our ability to achieve approximately $100 million in annual run-rate cost synergies which we expect will be fully realized within three years. These cost synergies have already been identified and are highly achievable and are primarily within corporate administrative spending, rationalizing the clinical cost structure, and consolidating facilities in IT systems.

Beyond that, we believe there is up to an additional 50 million of potential cost synergies and other margin enhancement opportunities that we have not modeled in our projections, were included in the synergy and accretion estimates that I mentioned earlier. These additional opportunities include implementing INC's therapeutic delivery model within inVentiv's full service offering, an area we saw a drive over a 100 basis point increase in full service margins. Utilizing INC's trusted process across inVentiv's clinical customers where appropriate. This scenario that we have found increases customer satisfaction, repeat business and higher margins add up to another 100 basis points. Leveraging the best-in-class capabilities from each CRO platform and finally consolidating inVentiv six clinical trial management systems and it exercise INC went through which led to 50 basis point to a 100 basis point improvement in our margins.

In addition to these margin enhancement opportunities, we have line of sight to improving the effective tax rate with the combined company from the 35% of that we have modeled to a rate of 33% and the possibility of a tax rate in the low 30s. Also, while when I change our effective tax rate, it's important to note that for tax purposes we can take advantage of inVentiv's nearly 850 million in net operating loss carry forwards, which we estimate over a 200 million to the combined company. For our customers, as we combined different customer bases, different geographies and complementary business, our top priority has continued to deliver the services to which they are accustomed and in a seamless manner. Given each company's history of successful integrations which I will touch on shortly, we are confident our integration will be seamless to our customers. We look forward to supporting and growing our relationships with existing and new customers as we move forward into this next chapter.

On Slide 26, we discuss our opportunities from meaningful revenue synergies from cross-selling. First, within our combined clinical customer base, we see an opportunity to bring inVentiv's FSP and hybrid model to many of INC's top 50 customers. We will leverage our combined therapeutic breadth and depth to establish larger and deeper relationships across all customer cycles. In our past, INC is seeing opportunities lost to a lesser competitor solely due to the competitor's ability to offer additional services. This transaction allow us to counter that.

Second, we see multiple ways in inVentiv's commercial offering your relationships will enhance our success rate and drive revenue synergies within our clinical operations. We believe leveraging inVentiv senior relationships from the commercial segment that allow us to open doors on the clinical side. We also see a real opportunity to bring value to our customers through strategic consulting engagements and our ability to offer Phase IV in real-world evidence studies. Finally, we believe there is an opportunity to cross-sell inVentiv's commercial services to INC's robust customer base of small to midsize biopharma company. These companies are currently underpenetrated by inVentiv's commercial business and have historically had the 30% to 50% of the economics of a newly approved drug to large pharma inter marketing agreements.

We believe the customer set with we are financially compelling and highly differentiated offering as a way to bring their products to market. Turning to Slide 27. It is important to understand that INC and inVentiv both have a history of value creation with successful integration of past acquisitions. We have done this without negatively impacting customers and while continuing to grow and expand our customer base. At INC, we have completed seven acquisitions since the beginning of 2007, two of which were transformational.

MDS Global Clinical Development in 2009 and Kendle International in 2011. It's important to note that many of the team involved in leading those successful integrations including Alistair Macdonald or so within INC today. For each of those, we see exceed cost synergy targets by more than 30%. And looking at the five year period from 2012 to 2016 after the Kendle acquisition, our adjusted EBITDA increased at a CAGR of more than 30% and our adjusted EBITDA margin improved by 910 basis points. inVentiv has completed 25 acquisitions since 2007 including PharmaNet and i3 both of which were transformational.

And that integration, inVentiv exceeded its cost synergy forecast by 25%. In the five year period from 2012 to 2016, inVentiv's clinical business EBITDA increased at a CAGR more than 20% and it's clinical business EBITDA margin expanded by 740 basis points. Clearly we know how to integrate and drive value creation. On Slide 28, we look at the credit profile that combine company. The combined company will generate significant cash flows.

We will start our net leverage on day one of the combination at approximately four times pro forma adjusted EBITDA. We expect to reduce our net leverage to under three times within approximately 18 to 24 months post-closing. A long term focus will be do deleveraging and optimizing our weighted average cost of debt, includes reducing inVentiv's balance of unsecured notes. We believe this capital structure position us for growth as we capitalize on many opportunities the combination creates for all stake holders. Now, I'll like to talk about INC's individual results for the first quarter 2017.

As Slide 29 indicates, we had a really strong quarter on all financial metrics. Most importantly, we delivered record new business awards looking to record net awards and net book-to-bill at 1.4. We also made significant progress into our key strategic goals, winning a large FSP award and two new preferred provider relationships from which we expect additional awards in the future. We exceeded the mid-point of our guidance for the quarter on each of these key metrics and through strong operational execution drove adjusted EBITDA margin to over 23%, again above our guidance range. We have posted our traditional earnings take on our website and I'll be glad to answer any questions on this call.

In order for our background on inVentiv, we've also included a few Slides and next shows the historical financial performance along with a brief summary of the first quarter results. A separate supplement on investor presentation was further back panned on inVentiv's also available on our website. Now, let me turn it back over to Alistair for a few closing remarks.

Alistair Macdonald: Thanks, Greg. As I hope, you all took away from our remarks.

We believe this is an exciting step forward trying to see and inVentiv as we bring together two of the most innovative and respected players in the field to create a leading global biopharma solutions organization. The customers with the combined company will be a top three CRO globally and the leading commercialization provider when an enhanced global platform and an expanded presence and important strategic geographies such as Asia Pacific. We will have the flexibility and debt to serve clients of all sizes and needs and have significant therapeutic expertise in core areas. The patients we will accelerate the delivery of therapies through our comprehensive suite of end-to-end solutions, the physicians we provide tools to improve adoption and adherence for important medicines, the payers we have the opportunity to satisfy demand for real world evidence and databased outcomes and for our 22,000 employees we will have a highly engaged world-class workforce leveraging best practices across the entire organization. Finally, for our shareholders, we expect the transaction to be accretive to INC's adjusted earnings per share in the first 12 months following close.

Mid to high single digits accretion in 2018 and over 20% accretive in 2019 and beyond. As a global leader with an expanded platform, the combined company has positioned for enhanced long-term growth. I speak for both Mac and myself in expressing how proud we are with what the INC and inVentiv employees have accomplished to-date. We look forward to working with inVentiv to capture the value creation opportunities that we will have together and a on my cheers my confidence in the path ahead. Thank you again for joining us today.

I will now turn it back over to the operator for any questions. Operator?

Operator: Thank you. [Operator Instructions] Our first question is from Robert Jones of Goldman Sachs. Your line is open.

Robert Jones: Great, yes.

Thanks for the question. I guess, just starting with the timing of the deal. I think inVentiv was so privately within the past year. So, as I think about the strategic rationale that you guys have shared with us today, I'm curious maybe to get dig into what piece has really drove the decision to do the deal right now. Was it the realization that you needed to bolster FSP, were you not keeping pace within a certain cohort of geography.

Just looking for a little bit more on the immediate strategic motivation for the deal and any additional color you're willing to share about how the deal came together, will be helpful.

Alistair Macdonald: Yes, thanks Bob. A long question to start with I guess. But we have simply excited about the strategic impact this brings. I'll hand off to Greg in a minute to grab some of the financial aspects.

When we look at the strategic imperatives that we've had, the vision that we've been trying to convey about our competitiveness in the FSP space, our capability to really take what work that we fill in with the customer in a full service mode when they flip to a hybrid or when they flip to an FSP, we need to be able to follow them. And when we've looked at the different options, being able to get in that market with somebody who have the experience, with somebody who has that reach, right sizing our operations in Asia, this really was a very compelling deal. And I think because you have seen from or hopefully got the sense from the transcripts and also from the Slides that we posted, you see a lot of those strategic goals that we had or satisfied with this. Yes, we go a lot of work to go on integration etcetera. But I think the strategic imperative for is really overrides everything else.

I'll let Greg speak to the kind of timing around the private sale versus this major transaction. Greg?

Greg Rush: Hi, how are you doing, Bob? One of the things that I'll just refer you to is Slide 13, just from a CRO perspective. We articulated for a while now what we thought we needed and to do over time organically or inorganically. And this was a really unique opportunity to check every one of those boxes and not just check them but check them with a bold check mark. And so, it really makes strategic sense.

From a financial perspective, you always have to weigh the cost of investment to build it yourself with the time to market. And in addition, even if you bought it yourself, all you do is have it told to go after the market. You don’t necessarily have the relationships with the customers. And this deal really was few minute on that. Lastly, we've been spending a lot of time for about a year and year and a half looking at the changing market what's really it’s real world evidence and the importance particularly in Europe of going beyond just getting the drug approved.

And so, the commercial aspect of the business has evolved and that's something that we've become very excited about over the last year. So, it's the timing I think that's something that as we got more and more knowledge of that particular area of the market, we became more and more excited and that helped drive back up. And then obviously and in CRO is just obviously it makes a good session with financial and strategic build.

Alistair Macdonald: Next question?

Operator: Our next question is from Erin Wright of Credit Suisse. Your line is open.

Erin Wright: Great, thanks. Hi, Alistair, Greg.

Alistair Macdonald: Hi, Erin.

Erin Wright: How I guess do you speak to some of the recent trends that you're seeing on the inVentiv side of the business as it relates to the CCO unit. And it looks like you saw double-digit growth in too many '16.

How sustainable is that growth rate and now you're able to sustain sort of above market trends there. And can you speak to some of the metrics or benchmarks that you look at to measure the performance across that business as we think about modeling the CCO side. Thanks.

Alistair Macdonald: Yes, thanks Erin. I'll give a little bit and I'll hand it off to Mike Bell who knows that side of the business a lot more, a lot back than we do right now.

So, when we're looking at what feeds that the CCO model. You're looking at product launches and new talks coming through. And I think when you look at the stats to 2016, the number of approvals through the FDA obviously that was a low point of I think the lowest points in 2007. We see a return to the, it's a really high levels of drug being approved through the FDA. I think we're at 20 already this year.

So, in five months you've got as many drugs improved as you had in the whole of the 12 months here. But I'll let Mike add more color to that. And Mike?

Mike Bell: Yes, thanks Alistair. Hi. Couple of things again, I think you may recall from previous chats but as Alistair mentioned, we do look a lot at new medical entities, we do look a lot new products getting approved.

And we still believe and quite fervently that the number of new drugs coming to market will be increasing and we done increasingly more specialized and increasingly more difficult to market or which pose well for the commercial business. I also think that as we're getting more and more out into the market place and talking to more general managers, we are finding that the discussions aren’t convincing people to go from doing things in-house versus doing things with an outsourced vendor. This is a market which has to be continually created simply because unlike the CRO business, less people have familiarity with outsourcing it. But we've had very good engagement from our key clients on that. And we continue to see multiple opportunities.

We also tend to look at the business regularly as a build up from the ground, looking at all new products coming to market with all the new companies in question, where we have strong client relationships and where we think we can go proactively and preemptively to make a bid. So, we are regularly looking at potential that we have to cover a year whenever we start looking at this detail.

Erin Wright: Thanks, Mike.

Operator: Our next question is from Dave Windley of Jefferies, your line is open.

Dave Windley: Hi, good morning thanks for talking my question.

Once the focus on kind of the client concentration, client overlap and I noted in your prepared remarks you mentioned little overlap in the areas that you do business, I perceive from that that you might have situation …that you might have situation where maybe inVentiv is doing work on the CCO side and INCR has it on the CRO side and so you’re differentiating there. I wanted to kind of get more perspective on that. And then, as part of this could you also talk about Greg the partnerships or the preferred providerships that INCR was able to secure in the first quarter. One of those I think you had indicated had the potential to have a lot of immediate work to it like rescue work that would come in with it that should influence the near term revenue forecast for INCR specifically and if you could give some perspective on that I’d appreciate it? Thanks.

Alistair Macdonald: Thanks Dave.

I’ll start with some of the headline stuff and pass off to Greg. So yes, your assumption is correct that in many of those clients whether it’s overlapped it is from CRO to CCO so inVentiv will be working on the CCO side. But there are some customers where we’re both present either as preferred providers or as transactional providers and in those where we’re preferred providers it’s from the due diligence we’re, INC has been a full service provider and inVentiv has been an FSP provider so they might be delivering a function or a clinical FSP in the region and we’re providing full service work in and around some of the more complicated disease states which is one of the kind of strategic discussions that we’ve had about how do we transition from one model to the other. How do we provide different models to the same customer and I think we’re confident in those instances where we do have model overlap or complimentary models in the same customer and we saw this actually in the kennel transaction. We had overlap over different models and it was seen as a big positive from our customers because they got the same level of service, they got the same kind of access but it took one of their vendors out of the equation.

So, the way to consolidate vendors and they always seem very happy with that. I’ll hand you off Greg to answer to the second part of the question.

Greg Rush: Dave, obviously they were down on that I’d tell you that we did a really comprehensive analysis looking at the customers of that and what we found is that we do not see any region for revenue to synergy which is answer to this question in CRO. And in fact, one of the things to resolve is that historically both companies have done a really good job with being a provider in particular therapeutic, we’ve seen this as part of our franchise in liquid tumors and we’ll be down with that large top 50 and basically do that entire amount of work. Where we’ve had challenges is what being seen with that particular top 20 or top 50 customer is having the breadth and depth globally to address their entire portfolio.

So, as we solved our customers’ individual portfolios move from one drug area to the other we often times were unable to move across that therapeutic shift in their pipeline and replace either one or two, number one and number two CRO provider which eliminates that. There is no reason why, when they look at us today that we given how strong and high quality work we provide them they shouldn’t look at us and say hey, you’re nationally are number two provider, number one provider now. So this one of the big reason strategically. As to our specific quarter, you’re right I can get two pieces of it. One, we did have a customer that we did win that was one of the strategic licenseships and we’ve been ordered a few of those rescue studies and that is – and that work again, the other pieces of those we expect later on in the year which will provide additional awards which is why I alluded to in my prepared remarks that we expect additional awards in the future from those customers and you’ll pick it up from the right point there.

And then lastly, don’t forget we did a second major FSP award, the largest in the company’s recent history, I think in the last four years it was a big deal also top 20 pharma in that situation it was in the data of safety area functional FSP. So, we had a great quarter, very strong quarter to give us a base to do this deal. Next question?

Operator: Thank you. Our next question is from John Kreger of William Blair, your line is open.

John Kreger: Hi thanks.

My question for you, I think historically there has been a lot of linkages between the clinical CRO business and the CCO. Is that something that you experienced and do you think that’s maybe changing going forward where you will get more sort of operational synergies across those two platforms or not, what’s your view on that?

Alistair Macdonald: Thanks John. So, I’ll start and I’ll hand you off to Mike as well. So, lot of the conversations we’ve had with customers over probably the last two years has been around what we can do for them in terms of real word evidence and commercial. Now we’ve been able to through our consulting group within INC, we’ve been able to provide them with a payout plan and the market access plan and that kind of thing.

But we’ve not been able to operationalize their commercial efforts and I think as some of our customers and as you know we put on and we’ve played in the small to mid market. So as customers mature their products and the market is now looking at more of a – can you get me a regulatory approval for the product but then, who is going to pay for it so that’s kind of double approval now is becoming more and more important and with the move to specialty medicines, often diseases that kind of thing, I think smaller companies do have the capability to commercialize their own products. So, one of the things that we think about in this transaction is our ability to bring that commercial consulting capability to the fact that we can build sales forces for them and be able to deliver their work commercially after we help them develop products and the real word evidence piece of stone is the real key element. I think in larger pharma where you can’t get to the one person that has the hands on both commercial and clinical there is still, it’s a longer road to get that altered by and into one package. But, we’re very aware of that obviously we’ll be running the businesses targeting to win clinical work and win commercial work not necessarily together but as separate business.

So kind of that’s our take on it that was one of the strategic imperatives that we looked out with this to be able to bring our commercial credentials, our capabilities into that small to mid market. Mike?

Michael Bell: Just a few additive comments hopefully. Historically on large biopharma where we work for 25 top pharma use services from both parts of our company. The buying process associated with large clinical design trials was different than what’s commercialization. What we’ve seen overtime is first and foremost as we’ve tried to get our folk to be more competitive informing them in the commercial side of that clinical release and informing the clinical design by the commercial win has worked quite well and starting to bridge that gap.

So, we’ve not technically buying all that stuff at once, we got bundling, it’s for them to make our folks modern and differentiate at the point. The second thing I would say is that in the mid to small market, the likelihood of a General Manager or a senior person being involved in the entire decision process from phase one all the way through the commercialization and acceptance as retail is much higher. And because of the current dynamic of the way the small and mid customers either commercialize their jobs or license them out to partners we think that there is a material opportunity to be able to sell much more of a bundled product in that environment because many of the people that house from this quite well are not terribly satisfied with some of the commercialization efforts they have seen from the people that they have used historically. So we think that economics of that as well as the market potential there is quite significant and that is a difference from large biopharma to the small and mid cap.

Ronnie Speight: Next question?

Operator: Our next question is from Tycho Peterson of JP Morgan, your line is open.

Tycho Peterson: So two to, got to squeeze them here. First, just on the CCO side, just curious for the INC folks, how much kind of customer polls you had for these types of services over the years and where you think we can go from a market penetration perspective, I think it’s only about 15% on the CCO markets now outsourced, where do you think that goes and either non-pharma customers also within that mix, I think there is a small portion from inVentiv of non-pharma services on the CCO side, so could you just touch on that?

Alistair Macdonald: Like I said with John’s question, I think we’ve seen a lot of interest from our customers that have 18 to 24 months around our capability to go further within the product developments. So getting them right and approved product has always been our traditional endpoint. We added consulting services to be able to give them a payout plan and the market access plan and we’ve done well in that area. Our customers that mid market, so our customers are interested in commercializing their own products here in the U.S.

and overseas. So the capability that we bring with this transaction enables us to do that enables us to continue walk in that lifecycle with them, taking them I think to borrow the inVentiv tag line to go from lab to life with them. So I think that’s a really interesting prospect for us. I’ll let Mike talk about the penetration on the market side of that on the CCO, but what our assumption is and what we see in trend wise is that pattern will follow what we’ve seen in both the CMO market than the CRO market as [indiscernible] in general look to verbalize more of their own costs.

Michael Bell: Yes, in the CCO marketplace in general, we’ve seen a pretty predictable growth rate overall for the penetration into that market which is quite similar, quite frankly to the way CRO has penetrated very early on.

So, if we look at that penetration growth, as I mentioned high single digit growth rate for the overall environment is very doable and part of the reason of that I think back to the old days in the CRO a lot of work was done to create the market and create the understanding for people inside big pharma to realize that outsourcing clinical trials to the third party was actually a good idea. So, a lot of wall marking efforts are less about competing with other folks but more about helping our clients think about make versus buy decisions on their own. Secondary question about that non-pharma that’s really a de-minimis market for us. Obviously, we keep an eye on it but the potential for us is so big in pharma that we’re really focusing on that first.

Operator: Thank you.

Our next question is from Eric Coldwell with Baird, your line is open.

Eric Coldwell: Hi thanks and good morning. I just wanted to come back to the revenue assumptions 2017 to 2020, if I read everything here correctly, it looks like INC standalone 10% combined company that seems to be without revenue synergies and obviously the growth is going to have to come off of wire base. So I guess the question is, we’re almost mid way through 2017, INC is growing about 1%, inVentiv looks down about 1%, I know your backlog run rates have slowed and you actually lowered the revenue forecast today despite the strong book-to-bill. So, I guess, I’m struggling to see how this is almost a double-digit grower on a combined basis give the base for starting from today and maybe you can help us understand a little better how we get to that level? Thank you.

Alistair Macdonald: Hi Eric, thanks for the question. I’ll go through it first from the CRO side. As you know a strong book-to-bill doesn’t immediately turn to revenue the next day. So we’ve looked at our backlog billed and a lot of those delays that we talked about on our fourth quarter call, the reason for 2017 delays to the second part of 2017, in our prepared remarks I talked about how our backlog was setting up nicely for the second half and beyond. So right now when I look at my backlog covers for 2018 is the strong that has been in three to four years and it supports that double-digit growth at this time.

Things can move, we got a lot to close to the rest of the year, but relative to where we’ve seen in the past its strong so that’s INC standalone. We’ve also looked inVentiv’s backlog and make sure that we understand how that looks and building out nicely for the CRO side. With regard to 2017, inVentiv, when you see at the deck at the end of 2016 they had a massive cancellation on the commercial side and it was too suddenly to drug company’s decision to pull the drug from the market. So effectively that’s keeping their commercial business down a little bit this year plus I think there is a slide in the deck that I think will tell, sorry slide 32 that talks about how 2016 was near record low on new drug approvals. And as we look at where we’re at today I 2017 they’re already effectively through last Friday at the same level they were for all of 2016.

We’ve looked at over 70 new drug applications this year, not all of this will get approved, but we think they’re on pace to double that is a huge leading indicators, you’re thinking about modeling the commercial business going forward is to what that market looks like. We look at the discussions in the pipeline with their customers, so the commercial business is not like the CRO, you’re going to have to sort of think of it differently, it’s not a backlog driven business. It’s to best indicators is what the sales pipeline, think of a software company, software company has zero backlog when they started the year and they filled their forecast and their analysts figure out what the revenue is going to be based on two things, where is the market going and two, where is that particular company’s thought in the market. We’re number one in the market, so we own this market and so that’s a good thing. And secondly, where is the market going and when you’re looking at new drug applications doubling and the pipeline discussions we’re having with customers, we’re confident in that double-digit number particularly when you look at the CRO backlog that supports double-digit that is more of that in-house you wanted type of backlog.

So, I wouldn’t give that kind of commentary if we didn’t fill at this stage they certainly see today that we were confident in it.

Operator: Thank you. Our next question is from Tim Evans of Wells Fargo, your line is open.

Tim Evans: Hi, thanks. I think your characterization about the fact that both inVentiv and INC have done a good job integrating companies in the past is quite fair.

I think it’s also fair to say though that right out of the gate both they say that [indiscernible] that deal on the inVentiv side and Kendle deal on the INC side encountered some hurdles in the first couple of years. Can you, I guess, both Mike and Alistair give us some historical context on what cost those issues with those deals and what makes you think that you can kind of sidestep that in this case?

Alistair Macdonald: Thanks for the question Tim. So integration is difficult, I don’t think we’re underestimating it at all. What we have done in the past in INC and will do it again is, use a transition management office staffed by season pros if you like from our operations management team. The two folks that we have in mind who are going to lead that effort from INC’s side and they will be people coming onto that team from the inVentiv team as well are the people who run both the integrations operationally for us on both the MBS acquisition in 2009 and the Kendle acquisition in 2011.

And you’re withholding you learn lessons as you move along, I think some of that issues that we had Kendle deal related to backlog primarily and closing out some of the projects that got away from them a little bit and that was difficult. And actually, we established some of that strongest relationship today still from those hard discussions that both Jamie and I had to go out and have with customers. So, we learned a lot from that I’m very confident that we can get this done. There is a lot more alignment between INC and inVentiv and I expect it to find when we first got into these discussions both around structure, around technology, inVentiv has done a lot of work over the last two or three years really their technology into focus. And our businesses run in a similar fashion and I think the technology structures you lined up and you can get your structure lined up, it really helps to get people attached to the model.

Culturally I think one of the big successes we had from Kendle was the culture that we created because we didn’t try and force INC’s culture on Kendle or vice versa, we created a new culture that everybody felt they could be successful in those who wanted to stay and wanted to drive forward and I think those lessons I think is what we’re deploying as we go through this integration.

Greg Rush: So, let me just add one thing Tim. I think there was a slight misperception on the transaction of Kendle. We had no operational issues in that thing, we integrated all the projects together within six months, our Trust helped pull that together so we had no issues there. We didn’t have issues for closing the talent we wanted to keep at all, our employees were very satisfied.

But what I think you’re referring to, if you remember Kendle was a public company and they were dropping, I think the revenue 475 two years for the deal and by the time we acquired them they were 300 million and the issues that we had, they were not financially well run company and that they had a lot of bids where they had mispriced them and in addition their business was declining. So what you saw in our numbers in the year after that was they continued operation of their fully contracted contracts that we had on and we call it, we call our customers, we’re going to honor this, we’re going to do high quality work for you and we’re going to deliver to you regardless of what the price was, we tried to renegotiate that paid off for us. So what you’re really reflecting is the year after the deals is that when we entered into this deal the one thing [indiscernible] make sure we understood their backlog and we did that appropriately at the time. If we made one mistake in the Kendle is understanding their backlog and we corrected for that in this deal.

Michael Bell: Just a couple of comments from the inVentiv side.

Two things, the first is that we actually similar to INC we actually did well on the integration effort in terms of operating costs but there were some issues associated with the customer overlapping backlog similar to what Greg just said. But I also would encourage you that just think about inVentiv in a slightly different way before 2014 and after 2014 because of many of the folks involved and some of those footfalls were no longer with us in the team that we have currently and also the team that [indiscernible] have fairly expensive experience and capability in integrating things. And I think if you look at our operating numbers from 2014 to the current period you can see that.

Operator: Our next question is from Sandy Draper of SunTrust, your line is open.

Sandy Draper: Thanks so much.

Maybe jumping back to the history of this and you touched on it a little bit and Bob was sort of alluding to it. But when you think about when the process started, you guys started talking, just trying to understand relative to the big merger Quintiles IMS, the challenges you experienced in the fourth quarter. Just trying to think how you think about this as, how much you’re reacting to those type of things obviously Greg as you mentioned you were already talking about things you needed to sell in, so there was clearly some long term strategy. But just thinking did the recent events in the second half of last year accelerate discussions from the INC side and maybe on Mike side from inVentiv, what was really the driving factor to get something done sooner rather than later on the inVentiv side? Thanks.

Alistair Macdonald: Sandy I think you’ll find all those details in the proxy that will get posted later today, couple of weeks that will get posted in a couple of weeks.

Mike and I have full of mutual respect for each other and for the businesses that we’ve been running. So, we share that strategic imperatives, wanted to bring this organizations together to build something that’s really unique, something that can compete across the CRO business, all scales and all territories with all types of customers and also it can bring a very compelling reward evidence and commercial story and service catalogue if you like to our customer basis. And I think the combination has huge strength, we’ve talked about on our previous question I think from Erin or from Dave about ticking off a lot of the boxes that we talked about in previous calls and our Investor Day last August about the strategic imperatives that we’ve created that we were running out to say. We look at lot deals, we look lot of the different strategic things with the board overtime and when we put this one through the process and we looked at what it drives that strategic imperatives really shelves out off the page and the finances have been supported. So we got really excited about it and got ahead with that.

Michael Bell: Let me add just a thought or echo to something Alistair said. I know that he and his team and I and our team had foursome plans to go ahead and succeed and continue our success path on our own. But we also acknowledge publicly in both cases that were strategic [indiscernible]. One of the things which is great about this is that filling the gaps becomes a lot quicker and a lot easier when you can find a way to do it like this as opposed to just simply organically doing it which is what in fact we’ve done a lot over the past years. So it was kind of more of a natural evolution of the strategy than anything else.

Alistair Macdonald: Excellent, one more that’s it.

Operator: Our last question is from Donald Hooker of KeyBanc, your line is open.

Donald Hooker: Great, good morning, congratulations, very exciting day. Kind of high level question, lot of the financial questions have been asked but you guys at INC have been pretty clear around your strategy with information technology using mainly third party application vendors. You might have talked about this a little bit I apologize if you did, but what is inVentiv strategy there, I mean, how often do they, what kind of proprietary data tools and information technology systems do they use or do they have a similar philosophy relying more on third parties?

Alistair Macdonald: I’ll start, like I said before one of the things that helps us in integration is IT alignment and same philosophies around that but I’ll let Mike speak to that.

Michael Bell: It’s worth noting that and again, starting 2014 we adopted the strategy of INC at the end [indiscernible] which is using third party vendors, verbalizing the cost, not being responsible for customized coding especially for anything related to infrastructure or basic operations. So we’ve virtually identical strategies out there that are little further ahead then we’re but philosophically we’re in complete alignment on the way we view that. In terms of data on a go forward is mentioned in the prior commentary, we create unique data every day and we will continue to work, to qualify that and manage that in different ways to drive insights. But again, most of the technology available, the technology part of that is available to third parties. But the data creation and insights generative map will be provided will be different.

Operator: There are no other questions in queue at this time, I’ll turn it back to management for closing remarks.

Alistair Macdonald: Thank you. I want to reiterate our excitement to today’s announcement and the many opportunities this merger creates for our combined companies including creating a top 3 global CRO and leading commercialization provider with the broadest offering of commercialization solutions. Mike and I and the management teams look forward to bringing our companies together and realizing the significant strategic benefits of this combination for all of our stakeholders. Thanks everybody.

Operator: Ladies and gentlemen, thank you for your participation in today’s conference, this concludes your program. You may now disconnect, everyone have a great day.