S-1 1 a2221668zs-1.htm S-1

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As filed with the Securities and Exchange Commission on October 6, 2014

Registration No. 333-           


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



INC Research Holdings, Inc.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
  8731
(Primary Standard Industrial
Classification Code Number)
  27-3403111
(I.R.S. Employer
Identification Number)

3201 Beechleaf Court, Suite 600
Raleigh, North Carolina 27604-1547
Telephone: (919) 876-9300
Facsimile: (919) 876-9360

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

D. Jamie Macdonald, Chief Executive Officer
Christopher L. Gaenzle, Esq., Chief Administrative Officer, General Counsel and Secretary
3201 Beechleaf Court, Suite 600
Raleigh, North Carolina 27604-1547
Telephone: (919) 876-9300
Facsimile: (919) 876-9360

(Name, address, including zip code, and telephone number, including area code, of agent for service)



Copies to:

Heather L. Emmel, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Telephone: (212) 310-8000
Facsimile: (212) 310-8007

 

Donald R. Reynolds, Esq.
S. Halle Vakani, Esq.
Wyrick Robbins Yates & Ponton LLP
4101 Lake Boone Trail, Suite 300
Raleigh, North Carolina 27607
Telephone: (919) 781-4000
Facsimile: (919) 781-4865

 

Marc D. Jaffe, Esq.
Ian D. Schuman, Esq.
Latham & Watkins LLP
885 Third Avenue
New York, New York 10022
Telephone: (212) 906-1200
Facsimile: (212) 751-4864



Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.

            If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended, or the Securities Act, check the following box. o

            If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

            If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

            If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

            Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "accelerated filer," "large accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o

CALCULATION OF REGISTRATION FEE

       
 
Title of Each Class of Securities
to be Registered

  Proposed Maximum
Aggregate Offering
Price(1)

  Amount of
Registration Fee

 

Class A Common Stock, par value $0.01 per share

  $150,000,000   $17,430

 

(1)
Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) promulgated under the Securities Act. Includes shares of Class A common stock that may be issuable upon exercise of an option to purchase additional shares granted to the underwriters.

            The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the Registration Statement shall become effective on such date as the Commission acting pursuant to said Section 8(a), may determine.

   


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The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion, Dated October 6, 2014.

PRELIMINARY PROSPECTUS

                  Shares

LOGO

INC Research Holdings, Inc.

Class A Common Stock



          This is an initial public offering of shares of Class A common stock of INC Research Holdings, Inc. All of the                           shares of Class A common stock offered hereby are being sold by the company.

          Prior to this offering, there has been no public market for the Class A common stock. It is currently estimated that the initial public offering price per share will be between $             and $             . We intend to list the shares on the NASDAQ Global Market under the symbol "INCR."

          We are an "emerging growth company" as defined under the federal securities laws and, as such, will be subject to reduced public company reporting requirements. See "Prospectus Summary—Implications of Being an Emerging Growth Company."

          See "Risk Factors" on page 17 to read about factors you should consider before buying shares of our Class A common stock.



          Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.



 
  Per Share   Total  

Initial public offering price

  $     $    

Underwriting discount(1)

  $     $    

Proceeds, before expenses, to us

  $     $    

(1)
We refer you to "Underwriting" beginning of page 148 of this prospectus for additional information regarding total underwriting compensation.

          To the extent that the underwriters sell more than             shares of Class A common stock, the underwriters have the option to purchase up to an additional              shares from us at the initial price to public less the underwriting discount.



          The underwriters expect to deliver the shares against payment in New York, New York on                      , 2014.



Goldman, Sachs & Co.   Credit Suisse


Baird

 

Wells Fargo Securities

 

William Blair



Prospectus dated                          , 2014.


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TABLE OF CONTENTS

 
  Page

PROSPECTUS SUMMARY

  1

RISK FACTORS

  17

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

  46

CORPORATE REORGANIZATION

  48

USE OF PROCEEDS

  49

DIVIDEND POLICY

  50

CAPITALIZATION

  51

DILUTION

  54

NON-GAAP FINANCIAL MEASURES

  56

SELECTED AND PRO FORMA CONSOLIDATED FINANCIAL DATA

  58

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

  64

BUSINESS

  94

MANAGEMENT

  112

EXECUTIVE AND DIRECTOR COMPENSATION

  120

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

  135

PRINCIPAL STOCKHOLDERS

  139

DESCRIPTION OF CAPITAL STOCK

  141

DESCRIPTION OF MATERIAL INDEBTEDNESS

  146

SHARES ELIGIBLE FOR FUTURE SALE

  150

MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS

  152

UNDERWRITING

  156

LEGAL MATTERS

  160

EXPERTS

  160

WHERE YOU CAN FIND MORE INFORMATION

  160

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

  F-1



          You should rely only on the information contained in this prospectus or in any free-writing prospectus we may authorize to be delivered or made available to you. Neither we nor the underwriters (or any of our or their respective affiliates) have authorized anyone to provide any information other than that contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. Neither we nor the underwriters (or any of our or their respective affiliates) take any responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the underwriters (or any of our or their respective affiliates) are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is only accurate as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.


TRADEMARKS

          We own or have the rights to use various trademarks referred to in this prospectus, including, among others, INC Research, PlanActivation, ProgramAccelerate, QualityFinish, QuickStart, the Trusted Process, Kendle and their respective logos. Solely for convenience, we may refer to trademarks in this prospectus without the TM and ® symbols. Such references are not intended to indicate, in any way, that we will not assert, to the fullest extent permitted by law, our rights to our trademarks. Other trademarks appearing in this prospectus are the property of their respective owners.

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MARKET AND INDUSTRY INFORMATION

          Market data used throughout this prospectus is based on management's knowledge of the industry and the good faith estimates of management. All of management's estimates presented herein are based on industry sources, including analyst reports, and management's knowledge. We also relied, to the extent available, upon management's review of independent industry surveys and publications prepared by a number of sources and other publicly available information. We refer herein to the 2013 CenterWatch Global Investigative Site Relationship Survey, which surveyed over 2,000 global sites to evaluate the performance of CROs across 36 specific relationship attributes. CenterWatch, a leading publisher in the clinical trials industry, conducted the biannual global survey of investigative sites during November/December 2012 and January 2013, soliciting online responses from principal investigators, sub-investigators and study coordinators about CROs they have worked with in the past two years. To develop the mailing list for the most recent survey, CenterWatch solicited investigative site contacts directly from all CROs based on investigative sites the sponsor or CRO had worked with actively in 2010, 2011 and through 2012. The sites selected were required to have sufficient experience with the sponsor or CRO to be able to evaluate the company on multiple project dimensions (sites selected could range from sites having completed at least a few patient visits to sites that have already completed studies). Respondents from sites were principal investigators, sub-investigators or study coordinators, and sites worldwide, with no limitations on countries, were surveyed.

          All of the market data used in this prospectus involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. While we believe the estimated market position, market opportunity and market size information included in this prospectus is generally reliable, such information, which in part is derived from management's estimates and beliefs, is inherently uncertain and imprecise. Projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in "Risk Factors" and elsewhere in this prospectus. These and other factors could cause results to differ materially from those expressed in our estimates and beliefs and in the estimates prepared by independent parties.

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PROSPECTUS SUMMARY

          This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our Class A common stock. You should read this entire prospectus carefully, including the risks of investing in our Class A common stock discussed under "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes thereto included elsewhere in this prospectus, before making an investment decision. Unless the context requires otherwise, references to "our company," "we," "us" and "our" refer to INC Research Holdings, Inc. and its direct and indirect subsidiaries, after giving effect to the corporate reorganization described below; references to "INC Holdings" refer to INC Research Holdings, Inc.; references to "INC Intermediate" refer to INC Research Intermediate, LLC and references to "INC" refer to INC Research, LLC, our wholly-owned subsidiary. Unless the context otherwise requires, references to "common stock" refer to our Class A common stock and our Class B common stock, which is convertible into our shares of our Class A common stock on a one-for-one basis, after giving effect to the corporate reorganization described under "Corporate Reorganization." References to GAAP are to the generally accepted accounting principles of the United States.


Overview

          We are a leading global Contract Research Organization, or CRO, based on revenues, and are exclusively focused on Phase I to Phase IV clinical development services for the biopharmaceutical and medical device industries. We provide our customers highly differentiated therapeutic alignment and expertise, with a particular strength in Central Nervous System, or CNS, oncology and other complex diseases. We consistently and predictably deliver clinical development services in a complex environment and offer a proprietary, operational approach to clinical trials through our Trusted Process® methodology. Our service offerings focus on optimizing the development of, and therefore, the commercial potential for, our customers' new biopharmaceutical compounds, enhancing returns on their research and development, or R&D, investments and reducing their overhead by offering an attractive variable cost alternative to fixed cost, in-house resources.

          Over the past decade, we have systematically built our scale and capabilities to become a leading global provider of Phase I to Phase IV clinical development services, with approximately 5,400 employees in 50 countries across six continents as of June 30, 2014. Our broad global reach has enabled us to provide clinical development services in over 100 countries. Our global footprint provides our customers with broad access to diverse markets and patient populations, local regulatory expertise and local market knowledge. We have developed our capabilities and infrastructure in parallel with our extensive, industry-leading relationships with principal investigators and clinical research sites, as demonstrated by our ranking as the "Top CRO" in the 2013 CenterWatch Global Investigative Site Relationship Survey, which was conducted by CenterWatch, a third-party leading publisher in the clinical trials industry. The survey covered responses from over 2,000 global sites across 36 specific relationship attributes about CROs that the sites surveyed have worked with in the past two years. Our diversified customer base includes a mix of many of the world's largest biopharmaceutical companies as well as high-growth, small and mid-sized biopharmaceutical companies.

          For the year ended December 31, 2013 and the six months ended June 30, 2014, we had total net service revenue of $652.4 million and $388.2 million, respectively, net loss of $(41.5) million and net income of $13.8 million, respectively, Adjusted Net Income of $15.4 million and $20.8 million, respectively, and Adjusted EBITDA of $105.5 million and $72.6 million, respectively. Net service revenue, Adjusted Net Income and Adjusted EBITDA increased by 12.7%, 462.2% and 25.1%, respectively, and net loss decreased by 29.7% for the year ended December 31, 2013 from

 

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the year ended December 31, 2012. As of June 30, 2014, we had outstanding term loans under the $375.0 million credit agreement that we entered into on July 12, 2011, or the 2011 Credit Agreement, of $291.0 million and $300.0 million aggregate principal amount of 11.5% Senior Notes, or the Notes. In connection with this offering, we intend to refinance our senior secured credit facilities and incur additional term loans thereunder in an aggregate principal amount of $           . We intend to use the proceeds of these borrowings, along with the proceeds of this offering and $             of cash on hand to redeem all of our outstanding Notes and pay any redemption premiums, make-whole interest and related fees and expenses. Following the repayment of our Notes, we expect to have $          million of term loans under our 2011 Credit Agreement. For a reconciliation of Adjusted Net Income and Adjusted EBITDA, each of which are non-GAAP measures, to our net income (loss), see "Selected and Pro Forma Consolidated Financial Data."


Our Market

          The market for our services includes biopharmaceutical companies that outsource clinical development services. We believe we are well-positioned to benefit from the following market trends:

          Trends in late-stage clinical development outsourcing.    Within the clinical development market, we primarily focus on Phase II to Phase IV clinical trials. Biopharmaceutical companies continue to prioritize the outsourcing of Phase II to Phase IV clinical trials, particularly in complex, high-growth therapeutic areas such as CNS, oncology and other complex diseases, which are our primary areas of therapeutic focus. We estimate, based on industry sources, including analyst reports, and management's knowledge, that the market for CRO services for Phase II to Phase IV clinical development services will grow at a rate of 8% to 9% annually through 2018, driven by a combination of increased development spend and further outsourcing penetration. In addition, we estimate that total biopharmaceutical spending on drug development in 2013 was approximately $74.6 billion, of which the clinical development market, which is the market for drug development following pre-clinical research, was approximately $65.1 billion. Of the $65.1 billion, we estimate our total addressable market to be $56.3 billion, after excluding $8.8 billion of indirect fees paid to principal investigators and clinical research sites, which are not a part of the CRO market. We estimate that total biopharmaceutical spending on clinical development will grow at a rate of 3% to 4% annually through 2018. In 2013, we estimate biopharmaceutical companies outsourced approximately $20.6 billion of clinical development spend to CROs, representing a 9% increase in such spending compared to 2012 and a penetration rate of 37% of our total addressable market. We estimate that this penetration rate will increase to 46% of our total addressable market by 2018.

          Optimization of biopharmaceutical R&D efficiency.    Market forces and healthcare reform place significant pressure on biopharmaceutical companies to improve cost efficiency. In response to high clinical trial costs, particularly in therapeutic areas such as CNS and oncology, which we believe present the highest mean cost per patient across all clinical trials, biopharmaceutical companies are streamlining operations and shifting development to external providers in order to lower their fixed costs. Based on efficiencies gained through experience, we estimate that CROs have shortened clinical testing timelines by as much as 30%. Full service CROs can deliver operational efficiencies, provide high visibility into trial conduct, and allow biopharmaceutical companies to focus internal resources on their core competencies related to drug discovery and commercialization.

          Globalization of clinical trials.    Clinical trials have become increasingly global as biopharmaceutical companies seek to accelerate patient recruitment, particularly within protocol-eligible, treatment-naïve patient populations (patient populations that have not previously received treatment for the particular disease) without co-morbidities (the presence of other diseases

 

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or disorders) that could skew clinical outcomes. Additionally, biopharmaceutical companies increasingly seek to expand the commercial potential of their products by applying for regulatory approvals in multiple countries, including in areas of the world with fast growing economies and middle classes that are spending more on healthcare. These trends emphasize the importance of global experience and geographic coverage, local market knowledge and coordination throughout the development process.

          Management of increasingly complex trials.    Complex trial design expertise has emerged as a significant competitive advantage for select CROs that have a track record of successfully navigating country-specific regulatory, trial protocol and patient enrollment barriers. Measures of clinical trial complexity significantly increased over the last decade, as evidenced by total procedures per trial protocol increasing by 57% between 2000 and 2011. In addition, the therapeutic areas where we have a particular focus, including CNS, oncology and other complex diseases, often require more complex testing protocols than other disease indications.


Our Competitive Strengths

          We believe that we are well positioned to capitalize on positive trends in the CRO industry and provide differentiated solutions to our customers based on our key competitive strengths set forth below:

          Deep and long-standing expertise in the largest and fastest growing therapeutic areas.    Over the past 20 years, we have focused on building world-class therapeutic expertise to better serve our customers. We provide a broad offering of therapeutic expertise, with our core focus in the largest and fastest growing therapeutic areas, including CNS, oncology and other complex diseases such as genetic disorders and infectious diseases, which collectively constitute over 75% of our backlog as of June 30, 2014. Based on industry data, we estimate that CNS, oncology and other complex diseases together represent over 55% of total Phase III drugs under development. We believe we have been growing faster than the market, resulting in market share gains in our key therapeutic areas. Our total net service revenue grew by 12.7% in 2013 and our net service revenue for CNS and oncology, collectively, grew by 21.3% in 2013.

          Clinical development focus and innovative operating model.    We derive approximately 99% of our net service revenue from clinical development services without distraction from lower growth, lower margin non-clinical business. Since 2006, we have conducted our clinical trials using our innovative Trusted Process® operating model, which standardizes methodologies, increases the predictability of the delivery of our services and reduces operational risk. Since initiation of the Trusted Process®, we have reduced median study start-up time (defined as the period from finalized protocol to first patient enrolled) on new projects by 26%. Based on industry sources for the median study start-up time for the biopharmaceutical industry, we believe we achieve this milestone for our customers at a significantly faster pace than industry medians. Ninety percent of our new business awards in 2013 were from repeat customers, which we believe is directly attributable to our innovative business model.

          Unmatched, industry-leading principal investigator and clinical research site relationships.    We have extensive relationships with principal investigators and clinical research sites. We believe these quality relationships are critical for delivering clinical trial results on time and on budget for our customers. Motivated and engaged investigative sites can facilitate faster patient recruitment, increase retention, maintain safety, ensure compliance with protocols as well as with local and international regulations, and streamline reporting. The ability to recruit and retain principal investigators and patients is an integral part of the clinical trial process. Our focus on principal investigator and clinical research site relationships is unmatched in the industry, as demonstrated

 

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by our ranking as the "Top CRO" in the 2013 CenterWatch Global Investigative Site Relationship Survey.

          Broad global reach with in-depth local market knowledge.    We believe that we are one of a few CROs with the scale, expertise, systems and agility necessary to conduct global clinical trials. We offer our services through a highly skilled staff of approximately 5,400 employees in 50 countries as of June 30, 2014 and have conducted work in over 100 countries. We have expanded our presence in high-growth international markets such as Asia-Pacific, Latin America and the Middle East and North Africa. Our comprehensive regulatory expertise and extensive local knowledge facilitate timely patient recruitment for complex clinical trials and improved access to treatment-naïve patients and to emerging markets, thereby reducing the time and cost of these trials for our customers while also optimizing the commercialization potential for new therapies.

          Diversified, loyal and growing customer base.    We have a well-diversified, loyal customer base of over 300 customers that includes many of the world's largest biopharmaceutical companies as well as high-growth, small and mid-sized biopharmaceutical companies. Further, many of our customers are diversified across multiple projects and compounds. Our top five customers represented approximately 54 compounds in 64 indications across 132 active projects and accounted for approximately 34% of our net service revenue in 2013. Our customer base is geographically diverse with well-established relationships in the United States, Europe and Asia. We believe the breadth of our footprint reduces our exposure to potential U.S. and European biopharmaceutical industry consolidation. For example, 25% of our 2013 net service revenue was associated with biopharmaceutical customers whose parent companies are headquartered in Japan. We believe that the tenure of our customer relationships as well as the depth of penetration of our services reflect our strong reputation and track record. While 90% of our new business awards in 2013 were from repeat customers and our top ten customers have worked with us for an average of six years, we were also awarded clinical trials from 53 new customers in 2013, with particularly strong growth among small to mid-sized biopharmaceutical companies. We have also increased our penetration in the large biopharmaceutical market, which we define as the top 50 biopharmaceutical companies measured by annual drug revenue, as evidenced by our new business awards from large biopharmaceutical companies growing by 46% in 2013. In the last twelve months we have performed work for all of the top 20 companies in the large biopharmaceutical market. We believe we have increased our market share significantly in recent years and are well poised to continue growing our customer base.

          Outstanding financial performance.    We have achieved significant revenue and EBITDA growth over the past several years. For example, during fiscal year 2013, we increased our net service revenue, Adjusted EBITDA and Adjusted Net Income by 12.7%, 25.1%, and 462.2%, respectively, and decreased our net loss by 29.7%. We have continued this growth in the first half of 2014 with year-over-year growth of our net service revenue, Adjusted EBITDA and Adjusted Net Income of 25.7%, 69.8% and 1,033.0%, respectively, and increased our net (loss) income from a loss of $27.4 million to net income of $13.8 million. The momentum in our business is also reflected in the growth in our backlog and new business awards (which is the value of future net service awards supported by contracts or pre-contract written communications from customers for projects that have received appropriate internal funding approval, are not contingent upon completion of another trial or event and are expected to commence within the next 12 months minus the value of cancellations in the same period). Backlog and new business awards are not necessarily predictive of future financial performance because they will likely be impacted by a number of factors, including the size and duration of projects which can be performed over several years, project change orders resulting in increases or decreases in project scope and cancellations. For the period from December 31, 2012 to June 30, 2014, our backlog increased by 13.0% and net new business awards grew by 20.4% during 2013 compared to 2012. We believe our outstanding

 

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financial profile and strong momentum demonstrate the quality of the platform we have built to position ourselves for continued future growth.

          Highly experienced management team with a deep-rooted culture of quality and innovation.    We are led by a dedicated and experienced senior management team with significant industry experience and knowledge focused on clinical development. Each of the members of our senior management has 20 years or more of relevant experience, including significant experience across the CRO and biopharmaceutical industries. Our management team has successfully grown our company into a leading CRO through a combination of organic growth and acquisitions and believes we are well positioned to further capitalize on industry growth trends.


Growth Strategy

          The key elements of our growth strategy include:

          Focus on attractive, high-growth late-stage clinical development services market.    We believe outsourcing late-stage clinical development services to CROs optimizes returns on invested R&D for biopharmaceutical companies. As development spend and outsourcing penetration rates continue to increase, we estimate that the late-stage clinical development services market will grow at a rate of 8% to 9% annually through 2018 and is poised to realize incremental growth relative to the overall CRO market. We believe that our core focus on the late-stage clinical development services market ideally positions us to benefit from this growth trend. Additionally, we believe that our differentiated approach of investing in highly experienced people, making better use of enabling technology and improving the process of clinical development, will allow our customers to generate superior returns.

          Leverage our expertise in complex clinical trials.    We intend to continue to develop and leverage our therapeutic expertise in complex clinical trials. We believe that our focus on and deep expertise in complex therapeutic areas such as CNS, oncology and other complex diseases better position us to win new clinical trials in these fast growing and large therapeutic areas. This is enhanced by the use of our proprietary Trusted Process® methodology that reduces operational risk and variability by standardizing processes and minimizing delays, instills quality throughout the clinical development process and leads customers to more confident, better-informed drug development decisions.

          Capitalize on our geographic scale.    We intend to leverage our global breadth and scale to drive continued growth. We have built our presence across key markets over time, developing strong relationships with principal investigators and clinical research sites around the world. We have expanded our patient recruitment capabilities, principal investigator relationships and local regulatory knowledge, which will continue to position us well for new customer wins in a wide array of markets. We have added geographic reach through both acquisitions and organic growth in areas such as Asia-Pacific, Latin America and the Middle East and North Africa, which we believe is critical to obtaining larger new business awards from large and mid-sized biopharmaceutical companies. Our long-term growth opportunities are enhanced by our strong reputation in emerging markets and our track record of efficiently managing trials in accordance with regional regulatory requirements.

          Continuous enhancement of our Trusted Process® methodology to deliver superior outcomes.    We intend to continue the development and enhancement of our Trusted Process® methodology, which has delivered measurable, beneficial results for our customers and improved drug development decisions. We believe our Trusted Process® will continue to lead to high levels of customer satisfaction. We expect that through continuous enhancement of our Trusted Process® methodology, we will achieve better alignment of best-in-class technology to enable increased

 

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visibility into critical processes, management and controls in the drug development process. We intend to continue to position ourselves to quickly adopt best-in-class technology through effective third-party collaborations without the need for high capital investments and maintenance costs, driving attractive returns on capital.

          Continue proven track record of identifying and successfully integrating selective acquisitions to augment our organic growth.    Over the past decade, we have developed a systematic approach for integrating acquisitions. We have successfully acquired and integrated ten companies. These strategic acquisitions have increased our size, scale and reach, complementing our organic growth profile as we have become a leading provider of CRO services. Our acquisitions have enabled us to expand our global service offerings across all four phases of biopharmaceutical clinical development while also allowing us to achieve significant synergies and cost reductions. We will continue to evaluate opportunities to acquire and integrate selective tuck-in acquisitions within the CRO sector in order to strengthen our competitive position and realize attractive returns on our investments.

          Driving our human capital asset base to grow existing relationships.    As a clinical service provider, our employees are critical to our ability to deliver our innovative operational model by engaging with customers, delivering clinical development services in a complex environment, and supporting and executing our growth strategy. All employees undergo comprehensive initial orientation and ongoing training, including a focus on our Trusted Process® methodology. Our recruiting and retention efforts are geared toward maintaining and growing a stable work force focused on delivering results for customers. We have a successful track record of integrating talent from prior acquisitions and believe we have a best-in-class pool of highly experienced project management and clinical research associates, or CRAs. A significant majority of our CRAs are specifically trained in individual therapeutic areas, with over 60% of our CRAs focused on CNS, oncology or other complex diseases. In addition, 85% of our CRAs are principally focused in one therapeutic area, and over 70% of our CRAs are solely focused in their area of expertise.


Implications of Being an Emerging Growth Company

          As a company with less than $1.0 billion in revenues during our last fiscal year, we qualify as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other regulatory requirements for up to five years that are otherwise applicable generally to public companies. These provisions include, among other matters:

    a requirement to present only two years of audited financial statements and only two years of related Management's Discussion and Analysis of Financial Condition and Results of Operations;

    exemption from the auditor attestation requirement on the effectiveness of our system of internal control over financial reporting;

    exemption from the adoption of new or revised financial accounting standards until they would apply to private companies;

    exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor's report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer;

    an exemption from the requirement to seek non-binding advisory votes on executive compensation and golden parachute arrangements; and

 

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    reduced disclosure about executive compensation arrangements.

          We will remain an emerging growth company for five years unless, prior to that time, we (i) have more than $1.0 billion in annual revenues, (ii) have a market value for our Class A common stock held by non-affiliates of more than $700 million as of the last day of our second fiscal quarter of the fiscal year when a determination is made whether we are deemed to be a "large accelerated filer," as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended, or the Exchange Act, or (iii) issue more than $1.0 billion of non-convertible debt over a three-year period. We have availed ourselves of the reduced reporting obligations with respect to executive compensation disclosure in this prospectus, and expect to continue to avail ourselves of the reduced reporting obligations available to emerging growth companies in future filings to the extent available.

          In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new and revised accounting standards. An emerging growth company can, therefore, delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to "opt out" of that extended transition period and, as a result, we plan to comply with new and revised accounting standards on the relevant dates on which adoption of those standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new and revised accounting standards is irrevocable.

          As a result of our decision to avail ourselves of certain provisions of the JOBS Act, the information that we provide may be different than what you may receive from other public companies in which you hold an equity interest. In addition, it is possible that some investors will find our Class A common stock less attractive as a result of our elections, which may cause a less active trading market for our Class A common stock and more volatility in our stock price.


Risks Associated with Our Business

          Investing in our Class A common stock involves a number of risks, including the following:

    If we do not generate a large number of new business awards, or if new business awards are delayed, terminated, or reduced in scope or fail to go to contract, our business, financial condition, results of operations or cash flows may be materially adversely affected.

    Our backlog might not be indicative of our future revenues, and we might not realize all of the anticipated future revenue reflected in our backlog.

    Our operating results have historically fluctuated between fiscal quarters and may continue to fluctuate in the future, which may adversely affect the market price of our stock after this offering.

    We have a history of net losses which may continue and which may negatively impact our ability to achieve or sustain profitability.

    If we underprice our contracts, overrun our cost estimates or fail to receive approval for or experience delays in documentation of change orders, our business, financial condition, results of operations or cash flows may be materially adversely affected.

    Our business depends on the continued effectiveness and availability of our information systems, including the information systems we use to provide services to our customers, and failures of these systems may materially limit our operations.

 

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    Our customer or therapeutic area concentration may have a material adverse effect on our business, financial condition, results of operations or cash flows.

    Our business is subject to international economic, political and other risks that could have a material adverse effect on our business, financial condition, results of operations, cash flows or reputation.

    If we are unable to successfully increase our market share, our ability to grow our business and execute our growth strategies could be materially adversely affected.

    If we fail to perform our services in accordance with contractual requirements, regulatory standards and ethical considerations, we could be subject to significant costs or liability and our reputation could be harmed.

    We may be affected by healthcare reform and potential additional reforms which may adversely impact the biopharmaceutical industry and reduce the need for our services or negatively impact our profitability.

    Our substantial debt could adversely affect our financial condition.

    We will incur increased costs and obligations as a result of being a public company.

    Our Sponsors, as defined below, will effectively control our company, and their interests may be different from or conflict with those of our other stockholders.

          These and other risks are more fully described in the section entitled "Risk Factors" below, which you should carefully read and consider before making a decision to invest in our Class A common stock. If any of these risks actually occur, our business, financial condition, results of operations, cash flows or reputation would likely be materially adversely affected. In such case, the trading price of our Class A common stock would likely decline, and you could lose all or part of your investment.


Our Sponsors

          Following the closing of this offering, affiliates of Avista Capital Partners, L.P., or Avista, and affiliates of Teachers Private Capital, or Teachers, the private investment arm of Ontario Teachers' Pension Plan Board, or OTPP, together will own a majority of our outstanding Class A common stock. We expect that following this offering Avista will own approximately         % of our outstanding Class A common stock, or    % if the underwriters' option to purchase additional shares is fully exercised, and Teachers will own approximately         % of our outstanding Class A common stock, or         % if the underwriters' option to purchase additional shares is fully exercised, and 100% of our outstanding Class B common stock following this offering. The Class A common stock and Class B common stock are each entitled to one vote per share and are substantially identical, except that Class B common stock will not carry the right to vote on the election of directors, and each share of Class B common stock will be convertible (on a one-for-one basis) into Class A common stock at any time at the election of the holder. We expect Teachers will own approximately         % of our Class A common stock assuming the conversion of all of its shares of new Class B common stock into shares of new Class A common stock. As a result, Avista and Teachers (each, a "Sponsor" and together, the "Sponsors") will be able to exert significant voting influence over fundamental and significant corporate matters and transactions. See "Risk Factors—Risks Related to Our Class A Common Stock and this Offering—Our Sponsors will effectively control our company, and their interests may be different from or conflict with those of our other stockholders" and "Principal Stockholders."

          Avista is a leading private equity firm with over $5 billion of assets under management and offices in New York, NY, Houston, TX and London, UK. Founded in 2005 as a spin-out from the

 

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former DLJ Merchant Banking Partners, or DLJMB, franchise, Avista makes controlling or influential minority investments primarily in growth-oriented healthcare, energy, communications and media, industrial and consumer businesses. Through its team of seasoned investment professionals and industry experts, Avista seeks to partner with exceptional management teams to invest in and add value to well-positioned businesses.

          OTPP is the largest single-profession pension plan in Canada, managing C$140.8 billion in net assets as of December 31, 2013. It is an independent organization responsible for investing the pension fund's assets and administering the pensions of Ontario's 307,000 active and retired teachers. OTPP has offices in Toronto, New York, London and Hong Kong. Teachers is the private investment arm of OTPP, managing $14.8 billion in invested capital as of December 31, 2013.


Corporate Reorganization

          Prior to the consummation of this offering, we will effect a corporate reorganization, whereby our direct, wholly-owned subsidiary, INC Intermediate, will merge with and into us, and we will be the surviving entity of such merger. As part of the merger, (i) each currently outstanding share of Class A common stock held by stockholders other than an affiliate of OTPP will be converted into           shares of new Class A common stock, (ii) each currently outstanding share of Class A common stock held by an affiliate of OTPP will be converted into           shares of new Class B common stock, (iii) each currently outstanding share of Class B common stock will be converted into one share of Class D common stock, and (iv) each currently outstanding share of Class C common stock will be converted into one share of new Class C common stock. Following the merger and prior to this offering, we will redeem all of the outstanding shares of new Class C common stock and Class D common stock for $           and $           , respectively, using cash on hand, and subsequent to such redemptions of the new Class C common stock and Class D common stock, we will amend and restate our certificate of incorporation to eliminate the new Class C common stock and the Class D common stock from our authorized common stock. In addition, as part of the merger, we will also effect a             for 1 reverse stock split of our Class A common stock. Immediately following the merger, an affiliate of OTPP will convert the relevant number of shares of new Class B common stock into new Class A common stock such that affiliates of OTPP hold no more than 30% of the total issued and outstanding new Class A common stock after giving effect to this offering. We refer to these steps as the "corporate reorganization." The corporate reorganization will not affect our operations, which we will continue to conduct through our operating subsidiaries. See "Corporate Reorganization."


Refinancing

          In connection with this offering, we intend to refinance our senior secured credit facilities and incur additional term loans thereunder in an aggregate principal amount of $           . We intend to use the proceeds of these borrowings, along with the proceeds of this offering and, assuming an initial public offering price of $       per share, which is the midpoint of the price range set forth on the cover page of this prospectus, $           of cash on hand to redeem all of our outstanding $300.0 million aggregate principal amount of Notes and pay any redemption premiums, make-whole interest and related fees and expenses. See "Description of Material Indebtedness."

 

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Our Structure

          The diagram below reflects a simplified overview of our organizational structure following the corporate reorganization, the refinancing of our senior secured credit facilities and this offering (including the application of the net proceeds therefrom):

GRAPHIC


(1)
References to our senior secured facilities are to our revolving credit facility and term loan facility under our 2011 Credit Agreement. See "Description of Material Indebtedness—Senior Secured Facilities."


Corporate Information

          We are a Delaware corporation and were incorporated on August 13, 2010. Our principal executive office is located at 3201 Beechleaf Court, Suite 600, Raleigh, North Carolina 27604-1547. Our telephone number at our principal executive office is (919) 876-9300. Our corporate website is www.incresearch.com. The information on our corporate website is not part of, and is not incorporated by reference into, this prospectus.

 

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THE OFFERING

Class A common stock offered by us

               shares (             shares if the underwriters' option to purchase additional shares is exercised in full).

Class A common stock to be outstanding after this offering

 

             shares (             shares if the underwriters' option to purchase additional shares is exercised in full).

Option to purchase additional shares of Class A common stock

 

The underwriters have the option to purchase up to an additional             shares of Class A common stock from us to cover over-allotments. The underwriters can exercise this option at any time within 30 days from the date of this prospectus.

Class B common stock outstanding after this offering

 

             shares.

Voting rights

 

Each share of the Class A common stock and Class B common stock are entitled to one vote per share, except that Class B common stock will not carry the right to vote on the election of directors.

Conversion rights

 

The shares of Class B common stock are convertible into Class A common stock, in whole or in part, at any time and from time to time at the option of the holder, on a one-for-one basis, subject to adjustment for any stock splits, combinations or similar events. The shares of Class A common stock are convertible into Class B common stock on a one-for-one basis, in whole or in part, at any time and from time to time at the option of the holder so long as such holder holds Class B common stock following the corporate reorganization, subject to adjustment for any stock splits, combinations or similar events.

Use of proceeds

 

We estimate that the net proceeds to us from our sale of             shares of Class A common stock in this offering will be approximately $       million, after deducting estimated underwriting discounts and commissions and estimated expenses payable by us in connection with this offering. This assumes a public offering price of $             , which is the midpoint of the price range set forth on the cover of this prospectus. We expect to use substantially all of the net proceeds from this offering, $             million of new term loans and approximately $             of cash on hand to redeem all of our outstanding Notes and pay any redemption premiums, make-whole interest and related fees and expenses. See "Use of Proceeds."

Dividend policy

 

We do not anticipate paying any dividends on our common stock in the foreseeable future; however, we may change this policy in the future. See "Dividend Policy."

 

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Risk factors

 

Investing in our Class A common stock involves a high degree of risk. See "Risk Factors" beginning on page 17 of this prospectus for a discussion of factors you should consider carefully before investing in our Class A common stock.

Proposed trading symbol

 

"INCR."

          Unless otherwise indicated, the number of shares of our common stock outstanding after this offering:

    gives effect to the corporate reorganization, including (i) the conversion of existing Class A common stock into             shares of new Class A common stock (including             shares of new Class B common stock outstanding following the corporate reorganization, which are convertible into shares of our Class A common stock on a one-for-one basis at any time at the option of the holders), and (ii) a             for 1 reverse stock split of our new Class A common stock;

    excludes             shares of our Class A common stock issuable upon exercise of outstanding stock options as of             , 2014 with a weighted average exercise price of $          per share;

    excludes             shares of our Class A common stock reserved for future issuance under our 2010 Equity Incentive Plan, or the 2010 Plan; and

    excludes             shares of our Class A common stock reserved for the future issuance under our 2014 Equity Incentive Plan, or the 2014 Plan.

          In addition, except where otherwise stated:

    the information in this prospectus gives effect to our corporate reorganization (including a         for 1 reverse stock split of our new Class A common stock) and the refinancing of our senior secured credit facilities as described in "—Corporate Reorganization" and "—Refinancing";

    the information in this prospectus gives effect to our amended and restated certificate of incorporation and our amended and restated bylaws, which will be in effect prior to the consummation of this offering; and

    the information in this prospectus assumes no exercise of the underwriters' over-allotment option to purchase up to             additional shares from us.

          Unless otherwise indicated, this prospectus assumes an initial public offering price of $             per share, which is the midpoint of the price range set forth on the cover of this prospectus.

 

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SUMMARY AND PRO FORMA CONSOLIDATED FINANCIAL DATA

          The following tables set forth our summary and pro forma consolidated financial data for the periods ending on and as of the dates indicated. We derived the consolidated statements of operations data for the years ended December 31, 2011, December 31, 2012 and December 31, 2013 from our audited consolidated financial statements and the related notes thereto included elsewhere in this prospectus. The consolidated statements of operations data for the six months ended June 30, 2013 and June 30, 2014 and the consolidated balance sheet data as of June 30, 2014 have been derived from our unaudited consolidated financial statements included elsewhere in this prospectus. We have prepared the unaudited consolidated financial information set forth below on the same basis as our audited consolidated financial statements and have included all adjustments, consisting of only normal recurring adjustments, that we consider necessary for a fair presentation of our financial position and operating results for such periods. The results for any interim period are not necessarily indicative of the results that may be expected for a full year.

          The summary unaudited pro forma data for the periods presented and the unaudited pro forma as adjusted balance sheet data as of June 30, 2014 have been prepared to give pro forma effect to the corporate reorganization, the refinancing of our senior secured credit facilities, the sale of our Class A common stock in this offering and the application of the net proceeds therefrom, including the repayment of certain indebtedness, as described in "Use of Proceeds."

          Our historical results are not necessarily indicative of future results of operations. You should read the information set forth below together with "Selected and Pro Forma Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Capitalization" and our consolidated financial statements and the related notes thereto included elsewhere in this prospectus.

 
  Year Ended December 31,   Six Months Ended
June 30,
 
 
  2011(1)   2012   2013   2013   2014  
 
  (in thousands, except per share amounts)
 

Statement of Operations Data:

                               

Net service revenue

  $ 437,005   $ 579,145   $ 652,418   $ 308,945   $ 388,240  

Reimbursable out-of-pocket expenses

    218,981     289,455     342,672     173,432     164,280  
                       

Total revenue

    655,986     868,600     995,090     482,377     552,520  

Direct costs

    279,840     389,056     432,261     211,265     251,545  

Reimbursable out-of-pocket expenses

    218,981     289,455     342,672     173,432     164,280  

Selling, general and administrative

    95,063     109,428     117,890     56,156     66,147  

Restructuring and other costs(2)

    27,839     35,380     11,828     7,145     3,175  

Transaction expenses(3)

    10,322         508     354     2,042  

Goodwill and intangible assets impairment(4)

        4,000             17,245  

Depreciation

    15,818     19,915     19,175     9,204     11,894  

Amortization

    48,318     58,896     39,298     19,665     13,740  
                       

Income (loss) from operations

    (40,195 )   (37,530 )   31,458     5,156     22,452  

Interest expense, net

    (65,482 )   (62,007 )   (60,489 )   (29,589 )   (28,724 )

Other income (expense), net

    11,519     4,679     (1,649 )   (1,065 )   1,041  
                       

Income (loss) before provision for income taxes

    (94,158 )   (94,858 )   (30,680 )   (25,498 )   (5,231 )

Income tax benefit (expense)

    34,611     35,744     (10,849 )   (1,882 )   18,986  
                       

Net (loss) income

    (59,547 )   (59,114 )   (41,529 )   (27,380 )   13,755  

Class C common stock dividend

    (4,500 )   (500 )   (500 )   (250 )   (250 )
                       

Net (loss) income attributable to Class A common stockholders

  $ (64,047 ) $ (59,614 ) $ (42,029 ) $ (27,630 ) $ 13,505  
                       
                       

 

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  Year Ended December 31,   Six Months Ended
June 30,
 
 
  2011(1)   2012   2013   2013   2014  
 
  (in thousands, except per share amounts)
 

Net (loss) income per Class A common share:

                               

Basic

  $ (0.17 ) $ (0.14 ) $ (0.10 ) $ (0.06 ) $ 0.03  

Diluted

    (0.17 )   (0.14 )   (0.10 )   (0.06 )   0.03  

Weighted average Class A common shares outstanding:

                               

Basic

    370,742     441,115     439,479     439,597     438,534  

Diluted

    370,742     441,115     439,479     439,597     439,959  

Unaudited Pro Forma Data:

   
 
   
 
   
 
   
 
   
 
 

Pro forma net (loss) income attributable to common stockholders(5)

              $           $    

Pro forma basic net (loss) income per common share(5)

                               

Pro forma diluted net (loss) income per common share(5)

                               

Pro forma weighted average common shares outstanding(5):

                               

Basic

                               

Diluted

                               

Statement of Cash Flow Data:

   
 
   
 
   
 
   
 
   
 
 

Net cash (used in) provided by:

                               

Operating activities

  $ (18,533 ) $ 42,999   $ 37,270   $ (3,476 ) $ 80,396  

Investing activities

    (369,670 )   (12,974 )   (17,714 )   (7,241 )   (15,241 )

Financing activities

    422,053     (18,932 )   (6,841 )   (2,077 )   (7,323 )

Other Financial Data:

   
 
   
 
   
 
   
 
   
 
 

EBITDA(6)

  $ 35,460   $ 45,960   $ 88,282   $ 32,960   $ 49,127  

Adjusted EBITDA(6)

    65,450     84,366     105,521     42,774     72,613  

Adjusted Net (Loss) Income(6)

    (3,711 )   2,735     15,375     1,837     20,813  

Diluted Adjusted Net (Loss) Income per common share(6)

    (0.01 )   0.01     0.03     0.00     0.05  

Adjusted Net Income, giving effect to the offering(6)

                           

Diluted Adjusted Net Income per common share, giving effect to the offering(6)

                           

Capital expenditures

    4,763     9,591     17,714     7,241     12,939  

Cash dividend paid to Class C stockholders

    4,500     500     500     250     250  

Operating Data:

   
 
   
 
   
 
   
 
   
 
 

Backlog(7)

  $ 1,221,641   $ 1,320,548   $ 1,490,787   $ 1,240,412   $ 1,492,660  

Net new business awards(8)

    449,254     676,250     814,177     231,139     384,259  

Net Book-to-Bill ratio(8)

    1.0x     1.2x     1.2x     0.7x     1.0x  

 

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  As of June 30, 2014  
 
  Actual   Pro Forma(10)   Pro Forma
As Adjusted(11)
 
 
  (in thousands)
 

Balance Sheet Data:

                   

Cash and cash equivalents

  $ 155,549   $     $    

Total assets

    1,320,521              

Total debt and capital leases(9)

    588,998              

Total stockholders' equity

    289,027              

(1)
We acquired Trident Clinical Research Pty Ltd., or Trident, on June 1, 2011 and Kendle International Inc., or Kendle, on July 12, 2011. The financial results of these entities have been included as of and since the date of acquisition. For further details, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—The Effect of Acquisitions on the Comparability of Our Historical Financial Statements" and Note 3 to our consolidated financial statements included elsewhere in this prospectus.

(2)
Restructuring and other costs consist of (i) severance costs associated with the reduction of our workforce in line with our future business operations and duplicative staff as a result of our acquisitions of Kendle and Trident, and (ii) lease obligation and termination costs in connection with the abandonment and closure of redundant facilities as a result of our restructuring initiatives. Other costs consist primarily of information technology and other consulting and legal fees attributable to our integration of Kendle.

(3)
Transaction expenses of $10.3 million for the year ended December 31, 2011 were related to legal fees, accounting fees and the noncapitalizable portion of bank fees related to our acquisition of Kendle. Transaction expenses of $0.5 million for the year ended December 31, 2013 were related to third-party fees associated with debt refinancing and the legal fees associated with our acquisition of MEK Consulting in March 2014, which we refer to as the MEK Consulting acquisition. For the six months ended June 30, 2013, transaction expenses were $0.4 million of legal fees associated with debt refinancing in February 2013. For the six months ended June 30, 2014, transaction expenses were $2.0 million and consisted of $1.7 million of third-party fees associated with the debt refinancing and $0.3 million of legal fees associated with the MEK Consulting acquisition.

(4)
During the year ended December 31, 2012, we recorded a $4.0 million impairment charge related to the goodwill associated with our Phase I Services reporting unit. During the six months ended June 30, 2014, we recorded a $17.2 million impairment charge related to intangible assets and goodwill associated with our Phase I Services and Global Consulting reporting units.

(5)
Pro forma net income and earnings per share:

Unaudited pro forma net (loss) income gives effect to (i) dividends deemed to be in contemplation of an initial public offering, and (ii) adjustments to interest expense and amortization of debt issuance costs related to (a) the repurchase of all of our outstanding Notes and (b) the borrowings under the $             of new term loans, the proceeds of which, along with $             proceeds from the initial public offering and $             of existing cash, will be used to repurchase such outstanding Notes, as described in "Use of Proceeds." Unaudited pro forma earnings per share gives effect to the sale of the number of shares of Class A common stock required, using an assumed initial public offering price of $       per share, which is the midpoint of the price range set forth on the cover of this prospectus, to (i) fund the deemed payment of dividends assumed to be in contemplation of the initial public offering, (ii) fund the proceeds used to repay the Notes, and (iii) give effect to our corporate reorganization immediately prior to the consummation of this offering. As the number of incremental shares that would have been issued related to the payment of the items listed above exceed the total number of shares to be issued in this offering, we have limited the number of pro forma shares for purposes of calculating the pro forma per share data to the total number of shares to be issued in the offering.

 

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    We declared and paid dividends to our Class C stockholder of $0.5 million during 2013 and $0.3 million during the six months ended June 30, 2014. Dividends declared in the year preceding an initial public offering are deemed to be in contemplation of the offering with the intention of repayment out of the offering proceeds to the extent that the dividends exceeded earnings during such period.

    For further details see "Selected and Pro Forma Consolidated Financial Data" included elsewhere in this prospectus.

(6)
We report our financial results in accordance with GAAP. To supplement this information, we also use the following non-GAAP financial measures in this prospectus: EBITDA, Adjusted EBITDA, Adjusted Net Income (including diluted Adjusted Net Income per share) and Adjusted Net Income, giving effect to the offering (including diluted Adjusted Net Income per share, giving effect to the offering). For a discussion of the non-GAAP financial measures in this prospectus, see "Non-GAAP Financial Measures." For reconciliations of EBITDA, Adjusted EBITDA, and Adjusted Net Income (including diluted Adjusted Net Income per share) to our closest reported GAAP measures, see "Selected and Pro Forma Consolidated Financial Data."

(7)
Backlog consists of anticipated net service revenue from contract and pre-contract commitments that are supported by written communications. The dollar amount of our backlog consists of anticipated future net service revenue from business awards that either have not started but are anticipated to begin in the next 12 months, or are in process and have not been completed. The majority of our contracts can be terminated by our customers with 30 days' notice. Backlog has been adjusted to reflect any cancellations or adjustments to the related contracts and changes in the foreign currency exchange rates of awards not denominated in U.S. dollars. Included within backlog at June 30, 2014 is approximately $1.1 billion that we do not expect to generate revenue in 2014. Backlog is not necessarily indicative of future financial performance because it will likely be impacted by a number of factors, including the size and duration of projects which can be performed over several years, project change orders resulting in increases or decreases in project scope and cancellations.

(8)
Net new business awards represent the value of future net service revenue awarded during the period supported by contracts or written pre-contract communications from our customers for projects that have received appropriate internal funding approval, are not contingent upon completion of another trial or event, and are expected to commence within the next 12 months, minus the value of cancellations in the same period. Net book-to-bill ratio represents "net new business awards" divided by net service revenue. We believe net book-to-bill ratio is commonly used in our industry and represents a useful indicator of our potential future revenue growth rate as it measures the rate at which we are generating net new business awards compared to our current revenues. Net book-to-bill is best viewed on a trailing twelve month basis due to the variability within any particular quarter that can be caused by a very large award or cancellation. The trailing twelve month net book-to-bill ratio for June 30, 2013 and June 30, 2014 was 0.8x and 1.3x, respectively. Further, we cannot assure you that the net book-to-bill rate is predictive of future financial performance because it will likely be impacted by a number of factors, including the size and duration of projects which can be performed over several years, project change orders resulting in increases or decreases in project scope and cancellations.

(9)
Includes $3.5 million of unamortized discounts as of June 30, 2014.

(10)
Pro forma information gives effect to our corporate reorganization as described in "Corporate Reorganization" immediately prior to the consummation of this offering.

(11)
Pro forma as adjusted information gives effect to our corporate reorganization as described in "Corporate Reorganization" and the refinancing of our senior secured credit facilities and adjusts our capitalization to reflect the sale of               shares of our Class A common stock in this offering by us at an assumed initial public offering price of $       per share, which is the midpoint of the price range set forth on the cover of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, and the application of the net proceeds from this offering as described in "Use of Proceeds."

 

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RISK FACTORS

          Investing in our Class A common stock involves a high degree of risk. You should consider carefully the risks and uncertainties described below together with the other information included in this prospectus, including our consolidated financial statements and the related notes thereto included elsewhere in this prospectus, before deciding to purchase our Class A common stock. The occurrence of any of the following risks may materially and adversely affect our business, financial condition, results of operations, cash flows, reputation and future prospects. In this event, the market price of our Class A common stock could decline, and you could lose part or all of your investment.

Risks Related to Our Business

If we do not generate a large number of new business awards, or if new business awards are delayed, terminated, reduced in scope or fail to go to contract, our business, financial condition, results of operations or cash flows may be materially adversely affected.

          Our business is dependent on our ability to generate new business awards from new and existing customers and maintain existing customer contracts for clinical development services and other services. Our inability to generate new business awards on a timely basis and subsequently enter into contracts for such awards could have a material adverse effect on our business, financial condition, results of operations or cash flows.

          The time between when a study is awarded and when it goes to contract is typically several months, and prior to a new business award going to contract, our customers can cancel the award without notice. Once an award goes to contract, the majority of our customers can terminate the contract with 30 days' notice. Our contracts may be delayed or terminated by our customers or reduced in scope for a variety of reasons beyond our control, including but not limited to:

    decisions to forego or terminate a particular trial;

    lack of available financing, budgetary limits or changing priorities;

    actions by regulatory authorities;

    production problems resulting in shortages of the drug being tested;

    failure of products being tested to satisfy safety requirements or efficacy criteria;

    unexpected or undesired clinical results for products;

    insufficient patient enrollment in a trial;

    insufficient principal investigator recruitment;

    shift of business to a competitor or internal resources; or

    product withdrawal following market launch.

          As a result, contract terminations, delays and modifications are a regular part of our business. In the event of termination, our contracts often provide for fees for winding down the project, which include both fees incurred and actual and noncancellable expenditures and may include a fee to cover a percentage of the remaining professional fees on the project. These fees may not be sufficient for us to maintain our margins, and termination may result in lower resource utilization rates and therefore lower operating margins. In addition, cancellation of a clinical trial for the reasons noted above may also result in the unwillingness or inability of our customer to satisfy certain associated accounts receivable, which may in turn result in a material impact to our results of operations and cash flow. Historically, cancellations and delays have negatively impacted our

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operating results. In addition, we might not realize the full benefits of our backlog if our customers cancel, delay or reduce their commitments to us, which may occur if, among other things, a customer decides to shift its business to a competitor or revoke our status as a preferred provider. Thus, the loss or delay of a large business award or the loss or delay of multiple awards could adversely affect our service revenues and profitability. Additionally, a change in the timing of a new business award could affect the period over which we recognize revenue and reduce our revenue in any one quarter.

Our backlog might not be indicative of our future revenues, and we might not realize all of the anticipated future revenue reflected in our backlog.

          Backlog consists of anticipated net service revenue awarded from contract and pre-contract commitments that are supported by written communications. Once work begins on a project, revenue is recognized over the duration of the project, provided the award has gone to contract. Projects may be canceled or delayed by the customer or delayed by regulatory authorities for reasons beyond our control. To the extent projects are delayed, the timing of our revenue could be adversely affected. In addition, if a customer terminates a contract, we typically would be entitled to receive payment for all services performed up to the termination date and subsequent customer-authorized services related to terminating the canceled project. Typically, however, we have no contractual right to the full amount of the future revenue reflected in our backlog in the event of a contract termination or subsequent changes in scope that reduce the value of the contract. The duration of the projects included in our backlog, and the related revenue recognition, typically range from a few months to several years. Our backlog might not be indicative of our future revenues, and we might not realize all the anticipated future revenue reflected in our backlog. A number of factors may affect backlog, including:

    the size, complexity and duration of projects;

    the cancellation or delay of projects;

    the failure of one or more business awards to go to contract; and

    changes in the scope of work during the course of projects.

          The rate at which our backlog converts to revenue may vary over time. The revenue recognition on larger, more global projects could be slower than on smaller, more regional projects for a variety of reasons, including, but not limited to, an extended period of negotiation between the time the project is awarded to us and the actual execution of the contract, as well as an increased timeframe for obtaining the necessary regulatory approvals. Additionally, delayed projects remain in backlog unless otherwise canceled by the customer, but do not generate revenue at the rate originally expected.

          Our backlog at June 30, 2014 was $1.5 billion. Although an increase in backlog will generally result in an increase in revenues over time, an increase in backlog at a particular point in time does not necessarily correspond directly to an increase in revenues during any particular period, or at all. The extent to which contracts in backlog will result in revenue depends on many factors, including, but not limited to, delivery against project schedules, scope changes, contract terminations and the nature, duration and complexity of the contracts, and can vary significantly over time.

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Our operating results have historically fluctuated between fiscal quarters and may continue to fluctuate in the future, which may adversely affect the market price of our stock after this offering.

          Our operating results have fluctuated in previous quarters and years and may continue to vary significantly from quarter to quarter and are influenced by a variety of factors, such as:

    timing of contract amendments for changes in scope that could affect the value of a contract and potentially impact the amount of net new business awards and net service revenues from quarter to quarter;

    commencement, completion, execution, postponement or termination of large contracts;

    contract terms for the billing and recognition of revenue milestones;

    progress of ongoing contracts and retention of customers;

    timing of and charges associated with completion of acquisitions and other events;

    changes in the mix of services delivered, both in terms of geography and type of services;

    potential customer disputes or other issues that may impact the revenue we are able to recognize or the collectability of our related accounts receivable; and

    exchange rate fluctuations.

          Our operating results for any particular quarter are not necessarily a meaningful indicator of future results and fluctuations in our quarterly operating results could negatively affect the market price and liquidity of our shares.

We have a history of net losses which may continue and which may negatively impact our ability to achieve or sustain profitability.

          We have a history of net losses and cannot assure you that we will achieve or sustain profitability on a quarterly or annual basis in the future. For the six months ended June 30, 2014, we had net income of $13.8 million. However, we incurred net losses for the years ended December 31, 2011, 2012 and 2013 of $59.5 million, $59.1 million and $41.5 million, respectively. If we cannot maintain our profitability, the value of our stock price may be impacted.

If we underprice our contracts, overrun our cost estimates or fail to receive approval for or experience delays in documentation of change orders, our business, financial condition, results of operations or cash flows may be materially adversely affected.

          We price our contracts based on assumptions regarding the scope of work required and cost to complete the work. We bear the financial risk if we initially underprice our contracts or otherwise overrun our cost estimates, which could adversely affect our cash flows and financial performance. In addition, contracts with our customers are subject to change orders, which occur when the scope of work we perform needs to be modified from that originally contemplated in our contract with the customers. This can occur, for example, when there is a change in a key study assumption or parameter or a significant change in timing. We may be unable to successfully negotiate changes in scope or change orders on a timely basis or at all, which could require us to incur cost outlays ahead of the receipt of any additional revenue. In addition, under GAAP, we cannot recognize additional revenue anticipated from change orders until appropriate documentation is received by us from the customer authorizing the change. However, if we incur additional expense in anticipation of receipt of that documentation, we must recognize the expense as incurred. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations or cash flows.

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Our business depends on the continued effectiveness and availability of our information systems, including the information systems we use to provide services to our customers, and failures of these systems may materially limit our operations.

          Our information systems comprise systems we have purchased or developed, legacy information systems from organizations we have acquired and, increasingly, due to the global nature of our business and our reliance on information systems (both internal and external) to provide our services, web-enabled and other integrated information systems. In using these information systems, we frequently rely on third-party vendors to provide hosting services, where our infrastructure is dependent upon the reliability of their underlying platforms, facilities and communications systems. We also utilize integrated information systems that we provide customers access to or install for our customers in conjunction with our delivery of services.

          As the breadth and complexity of our information systems continue to grow, we will increasingly be exposed to the risks inherent in maintaining the stability of our legacy systems due to prior customization, attrition of employees or vendors involved in their development, and obsolescence of the underlying technology. Because certain customers and clinical trials may be dependent upon these legacy systems, we also face an increased level of embedded risk in maintaining the legacy systems and limited options to mitigate such risk. We are also exposed to risks associated with the availability of all our information systems, including:

    disruption, impairment or failure of data centers, telecommunications facilities or other key infrastructure platforms, including those maintained by our third-party vendors;

    security breaches of, cyber-attacks on and other failures or malfunctions in our critical application systems or their associated hardware; and

    excessive costs, excessive delays or other deficiencies in systems development and deployment.

          The materialization of any of these risks may impede the processing of data, the delivery of databases and services, and the day-to-day management of our business and could result in the corruption, loss or unauthorized disclosure of proprietary, confidential or other data. While we have disaster recovery plans in place, they might not adequately protect us in the event of a system failure. Despite any precautions we take, damage from fire, floods, hurricanes, power loss, telecommunications failures, computer viruses, break-ins and similar events at our various computer facilities or those of our third-party vendors could result in interruptions in the flow of data to us and from us to our customers. Corruption or loss of data may result in the need to repeat a trial at no cost to the customer, but at significant cost to us, the termination of a contract or damage to our reputation. Additionally, significant delays in system enhancements or inadequate performance of new or upgraded systems once completed could damage our reputation and harm our business. Finally, long-term disruptions in the infrastructure caused by events such as natural disasters, the outbreak of war, the escalation of hostilities and acts of terrorism, particularly involving cities in which we have offices, could adversely affect our businesses. As our business continues to expand globally, these types of risks may be further increased by instability in the geopolitical climate of certain regions, underdeveloped and less stable utilities and communications infrastructure, and other local and regional factors. Although we carry property and business interruption insurance which we believe is customary for our industry, our coverage might not be adequate to compensate us for all losses that may occur.

          Unauthorized disclosure of sensitive or confidential data, whether through systems failure or employee negligence, fraud or misappropriation, could damage our reputation and cause us to lose customers. Similarly, we have been and expect that we will continue to be subject to attempts to gain unauthorized access to or through our information systems or those we internally or externally

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develop for our customers, including a cyber-attack by computer programmers and hackers who may develop and deploy viruses, worms or other malicious software programs. To date these attacks have not had a material impact on our operations or financial results. Nonetheless, successful attacks in the future could result in negative publicity, significant remediation costs, legal liability and damage to our reputation and could have a material adverse effect on our financial condition, results of operations and cash flows. In addition, our liability insurance might not be sufficient in type or amount to cover us against claims related to security breaches, cyber-attacks and other related breaches.

Our customer or therapeutic area concentration may have a material adverse effect on our business, financial condition, results of operations or cash flows.

          If any large customer decreases or terminates its relationship with us, our business, financial condition, results of operations or cash flows could be materially adversely affected. For the year ended December 31, 2013, our top ten customers based on revenue accounted for approximately 44% of our net service revenue and our top ten customers based on backlog accounted for approximately 58% of our total backlog. Various subsidiaries of Otsuka Holdings Co., Ltd. accounted for approximately 12%, 12% and 15% of our net service revenue in the years ended December 31, 2011, 2012 and 2013, respectively. It is possible that an even greater portion of our revenues will be attributable to a smaller number of customers in the future. Also, consolidation in our potential customer base results in increased competition for important market segments and fewer available customer accounts.

          Additionally, conducting multiple clinical trials for different sponsors in a single therapeutic class involving drugs with the same or similar chemical action may adversely affect our business if some or all of the trials are canceled because of new scientific information or regulatory judgments that affect the drugs as a class. Similarly, marketing and selling products for different sponsors with similar drug action subjects us to risk if new scientific information or regulatory judgment prejudices the products as a class, leading to compelled or voluntary prescription limitations or withdrawal of some or all of the products from the market.

Our business is subject to international economic, political and other risks that could have a material adverse effect on our business, financial condition, results of operations, cash flows or reputation.

          We have operations in many foreign countries, including, but not limited to, countries in the Asia-Pacific region, Europe, Latin America and the Middle East and Africa. As of June 30, 2014, approximately 56.5% of our workforce was located outside of the United States, and for the fiscal year ended December 31, 2013, approximately 28.2% of our net service revenue was billed to locations outside the United States. Our international operations are subject to risks and uncertainties inherent in operating in these regions, including:

    conducting a single trial across multiple countries is complex, and issues in one country, such as a failure to comply with or unanticipated changes to local regulations or restrictions such as restrictions on import or export of clinical trial material or availability of clinical trial data may affect the progress of the trial in the other countries, resulting in delays or potential termination of contracts, which in turn may result in loss of revenue;

    the United States or other countries could enact legislation or impose regulations or other restrictions, including unfavorable labor regulations, tax policies, data protection regulations or economic sanctions, which could have an adverse effect on our ability to conduct business in or expatriate profits from the countries in which we operate;

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    foreign countries are expanding or may expand their banking regulations that govern international currency transactions, particularly cross-border transfers, which may inhibit our ability to transfer funds into or within a jurisdiction, impeding our ability to pay our principal investigators, vendors and employees, thereby impacting our ability to conduct trials in such jurisdictions;

    foreign countries are expanding or may expand their regulatory framework with respect to patient informed consent, protection and compensation in clinical trials, additional transparency reporting requirements (similar to the Physician Payment Sunshine Act in the United States), which could delay, inhibit or prohibit our ability to conduct trials in such jurisdictions;

    the regulatory or judicial authorities of foreign countries might not enforce legal rights and recognize business procedures in a manner in which we are accustomed or would reasonably expect;

    changes in political and economic conditions, including inflation, may lead to changes in the business environment in which we operate, as well as changes in foreign currency exchange rates;

    potential violations of existing or newly adopted local laws or anti-bribery laws, such as the United States Foreign Corrupt Practices Act, or FCPA, and the UK Bribery Act of 2010, may cause a material adverse effect on our business, financial condition, results of operations, cash flows or reputation;

    customers in foreign jurisdictions may have longer payment cycles, and it may be more difficult to collect receivables in those jurisdictions;

    natural disasters, pandemics or international conflict, including terrorist acts, could interrupt our services, endanger our personnel or cause project delays or loss of trial materials or results;

    political unrest, such as the current situation in the Ukraine, could delay or disrupt the ability to conduct clinical trials; and

    foreign governments may enact currency exchange controls that may limit the ability to fund our operations or significantly increase the cost of maintaining operations.

These risks and uncertainties could negatively impact our ability to, among other things, perform large, global projects for our customers. Furthermore, our ability to deal with these issues could be affected by applicable U.S. laws. Any such risks could have an adverse impact on our business, financial condition, results of operations, cash flows or reputation.

Governmental authorities may question our intercompany transfer pricing policies or change their laws in a manner that could increase our effective tax rate or otherwise harm our business.

          As a U.S. company doing business in international markets through subsidiaries, we are subject to foreign tax and intercompany pricing laws, including those relating to the flow of funds between the parent and subsidiaries. Regulators in the United States and in foreign markets closely monitor our corporate structure and how we account for intercompany fund transfers. If regulators challenge our corporate structure, transfer pricing mechanisms or intercompany transfers, our operations may be negatively impacted and our effective tax rate may increase. Tax rates vary from country to country and if regulators determine that our profits in one jurisdiction should be increased, we might not be able to fully utilize all foreign tax credits that are generated, which would increase our effective tax rate. Additionally, the Organization for Economic Cooperation and

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Development, or OECD, has issued certain proposed guidelines regarding base erosion and profit sharing. Once these guidelines are formally adopted by the OECD, it is possible that separate taxing jurisdictions may also adopt some form of these guidelines. In such case, we may need to change our approach to intercompany transfer pricing in order to maintain compliance under the new rules. Our effective tax rate may increase or decrease depending on the current location of global operations at the time of the change. Finally, we might not always be in compliance with all applicable customs, exchange control, Value Added Tax and transfer pricing laws despite our efforts to be aware of and to comply with such laws. If these laws change we may need to adjust our operating procedures and our business could be adversely affected.

If we are unable to successfully increase our market share, our ability to grow our business and execute our growth strategies could be materially adversely affected.

          A key element of our growth strategy is increasing our market share both within the clinical development market and in the geographic markets in which we operate. As we grow our market share, we might not have or adequately build the competencies necessary to perform our services satisfactorily or may face increased competition. If we are unable to succeed in increasing our market share, we will be unable to implement this element of our growth strategy, and our ability to grow our business could be adversely affected.

Upgrading the information systems that support our operating processes and evolving the technology platform for our services pose risks to our business.

          Continued efficient operation of our business requires that we implement standardized global business processes and evolve our information systems to enable this implementation. We have continued to undertake significant programs to optimize business processes with respect to our services. Our inability to effectively manage the implementation of new information systems or upgrades and adapt to new processes designed into these new or upgraded systems in a timely and cost-effective manner may result in disruption to our business and negatively affect our operations.

          We have entered into agreements with certain vendors to provide systems development, integration and hosting services that develop or license to us the information technology, or IT, platforms and capacity for programs to optimize our business processes. If such vendors or their products fail to perform as required or if there are substantial delays in developing, implementing and updating our IT platforms, our customer delivery may be impaired, and we may have to make substantial further investments, internally or with third parties, to achieve our objectives. For example, we rely on an external vendor to provide the clinical trial management software used in managing the completion of our customer clinical trials. If that externally provided system is not properly maintained we might not be able to meet the obligations of our contracts or may need to incur significant costs to replace the system or capability. Additionally, our progress may be limited by parties with existing or claimed patents who seek to enjoin us from using preferred technology or seek license payments from us.

          Meeting our objectives is dependent on a number of factors which might not take place as we anticipate, including obtaining adequate technology-enabled services, depending upon our third-party vendors to develop and enhance existing applications to adequately support our business, creating IT-enabled services that our customers will find desirable and implementing our business model with respect to these services. Also, increased IT-related expenditures and our potential inability to anticipate increases in service costs may negatively impact our business, financial condition, results of operations or cash flows.

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We are in the process of implementing a new version of our Enterprise Resource Planning system and, if this new system proves ineffective, we may be unable to timely or accurately prepare financial reports or make payments to our principal investigators, vendors and employees, or invoice and collect from our customers.

          We are in the process of implementing a new version of our Enterprise Resource Planning, or ERP, system. Any delay in the implementation of, or disruption in the upgrade of this system could adversely affect our ability to timely and accurately report financial information, including the filing of our quarterly or annual reports with the SEC. Such delay or disruption could also impact our ability to timely or accurately make payments to our principal investigators, vendors and employees, and could also inhibit our ability to invoice and collect from our customers. When we upgrade our ERP system, data integrity problems or other issues may be discovered that if not corrected could impact our business or financial results. In addition, we may experience periodic or prolonged disruption of our financial functions arising out of this conversion, general use of such systems, other periodic upgrades or updates, or other external factors that are outside of our control. If we encounter unforeseen problems with our financial system or related systems and infrastructure, our business, operations, and financial systems could be adversely affected. We may need to implement additional systems or transition to other new systems that require new expenditures in order to function effectively as a public company. There can be no assurance that our implementation of additional systems or transition to new systems will be successful, or that such implementation or transition will not present unforeseen costs or demands on our management.

If we fail to perform our services in accordance with contractual requirements, regulatory standards and ethical considerations, we could be subject to significant costs or liability and our reputation could be harmed.

          We contract with biopharmaceutical companies to perform a wide range of services to assist them in bringing new drugs to market. Our services include monitoring clinical trials, data and laboratory analysis, electronic data capture, or EDC, patient recruitment and other related services. Such services are complex and subject to contractual requirements, regulatory standards and ethical considerations. For example, we must adhere to applicable regulatory requirements such as the United States Food and Drug Administration, or the FDA, current Good Clinical Practice, or GCP, regulations, which govern, among other things, the design, conduct, performance, monitoring, auditing, recording, analysis, and reporting of clinical trials. If we fail to perform our services in accordance with these requirements, regulatory agencies may take action against us or our customers. Such actions may include sanctions such as injunctions or failure of such regulatory authorities to grant marketing approval of products, imposition of clinical holds or delays, suspension or withdrawal of approvals, rejection of data collected in our studies, license revocation, product seizures or recalls, operational restrictions, civil or criminal penalties or prosecutions, damages or fines. Additionally, there is a risk that actions by regulatory authorities, if they result in significant inspectional observations or other measures, could harm our reputation and cause customers not to award us future contracts or to cancel existing contracts. Any such action could have a material adverse effect on our business, financial condition, results of operations, cash flows or reputation.

          Such consequences could arise if, among other things, the following occur:

          Improper performance of our services.    The performance of clinical development services is complex and time-consuming. For example, we may make mistakes in conducting a clinical trial that could negatively impact or obviate the usefulness of the trial or cause the results of the trial to be reported improperly. If the trial results are compromised, we could be subject to significant costs

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or liability, which could have an adverse impact on our ability to perform our services and our reputation could be harmed. As examples:

    non-compliance generally could result in the termination of ongoing clinical trials or the disqualification of data for submission to regulatory authorities;

    compromise of data from a particular trial, such as failure to verify that adequate informed consent was obtained from subjects or improper monitoring of data, could require us to repeat the trial under the terms of our contract at no further cost to our customer, but at a substantial cost to us; and

    breach of a contractual term could result in liability for damages or termination of the contract.

Large clinical trials can cost hundreds of millions of dollars and improper performance of our services could have a material adverse effect on our financial condition, damage our reputation and result in the termination of current contracts by or failure to obtain future contracts from the affected customer or other customers.

          Interactive Voice/Web Response Technology malfunction.    We develop, maintain and use third-party computer run interactive voice/web response systems to automatically manage the randomization of patients in a given clinical trial to different treatment arms and regulate the supply of investigational drugs, all by means of interactive voice/web response systems. An error in the design, programming or validation of these systems could lead to inappropriate assignment or dosing of patients which could give rise to patient safety issues, invalidation of the trial or liability claims against us. Furthermore, negative publicity associated with such a malfunction could have an adverse effect on our business and reputation. Additionally, errors in randomization may require us to repeat the trial at no further cost to our customer, but at a substantial cost to us.

          Investigation of customers.    From time to time, one or more of our customers are audited or investigated by regulatory authorities or enforcement agencies with respect to regulatory compliance of their clinical trials, programs or the marketing and sale of their drugs. In these situations, we have often provided services to our customers with respect to the clinical trials, programs or activities being audited or investigated, and we are called upon to respond to requests for information by the authorities and agencies. There is a risk that either our customers or regulatory authorities could claim that we performed our services improperly or that we are responsible for clinical trial or program compliance. If our customers or regulatory authorities make such claims against us and prove them, we could be subject to damages, fines or penalties. In addition, negative publicity regarding regulatory compliance of our customers' clinical trials, programs or drugs could have an adverse effect on our business and reputation.

          Insufficient customer funding to complete a clinical trial.    As noted above, clinical trials can cost hundreds of millions of dollars. There is a risk that we may initiate a clinical trial for a customer, and then the customer becomes unwilling or unable to fund the completion of the trial. In such a situation, notwithstanding the customer's ability or willingness to pay for or otherwise facilitate the completion of the trial, we may be ethically bound to complete or wind down the trial at our own expense.

          In addition to the above U.S. laws and regulations, we must comply with the laws of all countries where we do business, including laws governing clinical trials in the jurisdiction where the trials are performed. Failure to comply with applicable requirements could subject us to regulatory risk, liability and potential costs associated with redoing the trials, which could damage our reputation and adversely affect our operating results.

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Any future litigation against us could be costly and time-consuming to defend.

          We may become subject, from time to time, to legal proceedings and claims that arise in the ordinary course of business or pursuant to governmental or regulatory enforcement activity. While we do not believe that the resolution of any currently pending lawsuits against us will, individually or in the aggregate, have a material adverse effect on our business, financial condition, results of operations or cash flows, litigation to which we subsequently become a party might result in substantial costs and divert management's attention and resources, which might seriously harm our business, financial condition, results of operations and cash flows. Insurance might not cover such claims, might not provide sufficient payments to cover all of the costs to resolve one or more such claims, and might not continue to be available on terms acceptable to us. In particular, any claim could result in potential liability for us if the claim is outside the scope of the indemnification agreement we have with our customers, our customers do not abide by the indemnification agreement as required or the liability exceeds the amount of any applicable indemnification limits or available insurance coverage. A claim brought against us that is uninsured or underinsured could result in unanticipated costs and could have a material adverse effect on our financial condition, results of operations, cash flows or reputation.

Our business exposes us to potential liability for personal injury or claims that could materially adversely affect our business, financial condition, results of operations, cash flows or reputation.

          Our business involves clinical trial management, which is one of our clinical development service offerings and includes the testing of new drugs on human volunteers. This business exposes us to the risk of liability for personal injury or death to patients resulting from, among other things, possible unforeseen adverse side effects or improper administration of a drug or device. Many of these volunteers and patients are already seriously ill and are at risk of further illness or death. Although we attempt to negotiate indemnification arrangements with our customers or vendors, we might not be able to collect under these arrangements and our exposure could exceed any contractual limits on indemnification. Any claim or liability could have a material adverse effect on our business, financial condition, results of operations, cash flows or reputation.

If our insurance does not cover all of our indemnification obligations and other liabilities associated with our operations, our business, financial condition, results of operations or cash flows may be materially adversely affected.

          We maintain insurance designed to provide coverage for ordinary risks associated with our operations and our ordinary indemnification obligations which we believe to be customary for our industry. The coverage provided by such insurance might not be adequate for all claims we may make or may be contested by our insurance carriers. If our insurance is not adequate or available to pay all claims or exposures associated with our operations, or if we are unable to purchase adequate insurance at reasonable rates in the future, our business, financial condition, results of operations or cash flows may be materially adversely affected.

If we are unable to attract suitable principal investigators and recruit and enroll patients for clinical trials, our clinical development business might suffer.

          The recruitment of principal investigators and patients for clinical trials is essential to our business. Principal investigators are typically located at hospitals, clinics or other sites and supervise the administration of the investigational drug to patients during the course of a clinical trial. Patients generally include people from the communities in which the clinical trials are conducted. Our clinical development business could be adversely affected if we are unable to attract suitable and willing principal investigators or recruit and enroll patients for clinical trials on a consistent basis. The expanding global nature of clinical trials increases the risk associated with

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attracting suitable principal investigators and patients, especially if these trials are conducted in regions where our resources or experience may be more limited. For example, if we are unable to engage principal investigators to conduct clinical trials as planned or enroll sufficient patients in clinical trials, we might need to expend additional funds to obtain access to more principal investigators and patients than planned or else be compelled to delay or modify the clinical trial plans, which may result in additional costs to us or cancellation of the trial by our customer. If realized, these risks may also inhibit our ability to attract new business, particularly in certain regions.

Many of the costs for our Phase I Services segment are fixed in nature, which could adversely affect our business, financial condition, results of operations and cash flows.

          Since a large amount of the operating costs for our Phase I Services segment are relatively fixed while revenue is subject to fluctuation, moderate variations in the commencement, progress or completion of the Phase I studies in our Phase I Services segment may cause variations in our financial condition, results of operations and cash flows. Expenses must be recognized when incurred and the delay of a contract could adversely affect our service revenues and profitability. Net service revenue from our Phase I Services segment for the year ended December 31, 2013 represented approximately 3.6% of our total net service revenue for that period.

If we lose the services of key personnel or are unable to recruit experienced personnel, our business, financial condition, results of operations, cash flows or reputation could be materially adversely affected.

          Our success substantially depends on the collective performance, contributions and expertise of our senior management team and other key personnel including qualified management, professional, scientific and technical operating staff and business development personnel. There is significant competition for qualified personnel, particularly those with higher educational degrees, in the biopharmaceutical and related services industries. In addition, the close proximity of some of our facilities to offices of our major competitors could adversely impact our ability to successfully recruit and retain key personnel. The departure of any key executive, or our inability to continue to identify, attract and retain qualified personnel or replace any departed personnel in a timely fashion, might impact our ability to grow our business and compete effectively in our industry and might negatively affect our business, financial condition, results of operations, cash flows or reputation.

Exchange rate fluctuations may have a material adverse effect on our business, financial condition, results of operations or cash flows.

          Approximately 27% of our fiscal year 2013 net service revenues were contracted in currencies other than U.S. dollars and 41% of our direct and operating costs are incurred in countries with functional currencies other than U.S. dollars. Our financial statements are reported in U.S. dollars and changes in foreign currency exchange rates could significantly affect our financial condition, results of operations and cash flows. Exchange rate fluctuations between local currencies and the U.S. dollar create risk in several ways, including:

          Foreign Currency Risk from Differences in Customer Contract Currency and Operating Costs Currency.    The majority of our global contracts are denominated in U.S. dollars or Euros while the currency used to fund our operating costs in foreign countries is denominated in various different currencies. Fluctuations in the exchange rates of the currencies we use to contract with our customers and the currencies in which we incur cost to complete those contracts can have a significant impact on our results of operations.

          Foreign Currency Translation Risk.    The revenue and expenses of our international operations are generally denominated in local currencies and translated into U.S. dollars for financial reporting

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purposes. Accordingly, exchange rate fluctuations will affect the translation of international results into U.S. dollars for purposes of reporting our consolidated results.

          Foreign Currency Transaction Risk.    We are subject to foreign currency transaction risk for fluctuations in exchange rates during the period of time between the consummation and cash settlement of a transaction. We earn revenue from our service contracts denominated in currencies other than U.S. dollars over a period of several months and, in many cases, over several years. Accordingly, exchange rate fluctuations during this period may affect our profitability with respect to such contracts.

          We may limit these risks through exchange rate fluctuation provisions stated in our service contracts, or we may hedge our transaction risk with foreign currency exchange contracts or options. We have not, however, mitigated all of our foreign currency transaction risk, and we may experience fluctuations in financial results from our operations outside the United States and foreign currency transaction risk associated with our service contracts.

Unfavorable economic conditions could have a material adverse effect on our business, financial condition, results of operations or cash flows.

          Unfavorable economic conditions, including disruptions in the credit and capital markets, could have a negative effect on our business, financial condition, results of operations and cash flows. For example, our customers might not be able to raise money to conduct existing clinical trials, or to fund new drug development and related future clinical trials. In addition, economic or market disruptions could negatively impact our vendors, contractors, or principal investigators which might have a negative effect on our business.

Our effective income tax rate may fluctuate, which may adversely affect our results of operations.

          Our effective income tax rate is influenced by our projected profitability in the various taxing jurisdictions in which we operate. Changes in the distribution of profits and losses among taxing jurisdictions may have a significant impact on our effective income tax rate, which in turn could have an adverse effect on our results of operations. Further, we have a full valuation allowance on our net operating loss carryforwards and other net deferred tax assets in the United States and United Kingdom, our principal contracting locations. Accordingly, under GAAP, we do not recognize a tax benefit or expense in current operations for income generated in these jurisdictions. Factors that may affect our effective income tax rate include, but are not limited to:

    the requirement to exclude from our quarterly worldwide effective income tax calculations the benefit for losses in jurisdictions where no income tax benefit can be recognized;

    actual and projected full year pre-tax income;

    the repatriation of foreign earnings to the United States;

    uncertain tax positions;

    changes in tax laws in various taxing jurisdictions;

    audits by taxing authorities;

    the establishment of valuation allowances against deferred income tax assets if we determine that it is more likely than not that future income tax benefits will not be realized;

    the release of a previously established valuation allowances against deferred income tax assets if we determine that it is more likely than not that future income tax benefits will be realized; and

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    changes in the relative mix and size of clinical studies in various tax jurisdictions.

These changes may cause fluctuations in our effective income tax rate that could adversely affect our results of operations and cause fluctuations in our earnings and earnings per share.

We may be limited in our ability to utilize, or may not be able to utilize, net operating loss, or NOL, carryforwards to reduce our future tax liability.

          As of December 31, 2013, we had U.S. federal NOL carryforwards of $191 million and state NOL carryforwards of $239 million, which may be limited annually due to certain change in ownership provisions of Section 382 of the Internal Revenue Code of 1986, as amended, or the Code. Our federal NOL carryforwards will begin to expire in 2018 and will completely expire in 2033. Our state NOL carryforwards may be used over various periods ranging from one to 20 years. See Note 10 to our consolidated financial statements included elsewhere in this prospectus for a further discussion of our tax loss carryovers and current limitations on our ability to utilize NOLs.

          Future ownership changes within the meaning of Section 382(g) of the Code may subject our tax loss carryforwards to annual limitations which would restrict our ability to use them to offset our taxable income in periods following the ownership changes. In general, the annual use limitation equals the aggregate value of our equity at the time of the ownership change multiplied by a specified tax-exempt interest rate.

          We have had significant financial losses in previous years and, as a result, we currently maintain a full valuation allowance for our deferred tax assets including our federal and state NOL carryforwards.

We have only a limited ability to protect our intellectual property rights, and these rights are important to our success.

          We develop, use and protect our proprietary methodologies, analytics, systems, technologies and other intellectual property. Existing laws of the various countries in which we provide services or solutions offer only limited protection of our intellectual property rights, and the protection in some countries may be very limited. We rely upon a combination of trade secrets, confidentiality policies, nondisclosure agreements, and other contractual arrangements, and copyright and trademark laws, to protect our intellectual property rights. These laws are subject to change at any time and certain agreements might not be fully enforceable, which could further restrict our ability to protect our innovations. Our intellectual property rights might not prevent competitors from independently developing services similar to or duplicative of ours or alleging infringement by us of their intellectual property rights in certain jurisdictions. The steps we take in this regard might not be adequate to prevent or deter infringement or misappropriation of our intellectual property or claims against us for alleged infringement or misappropriation by competitors, former employees or other third parties. Furthermore, we might not be able to detect unauthorized use of, or take appropriate and timely steps to enforce, our intellectual property rights. Enforcing our rights might also require considerable time, money and oversight, and we might not be successful in enforcing our rights.

If we are unable to successfully integrate potential future acquisitions, our business, financial condition, results of operations and cash flows could be materially adversely affected.

          We have completed a number of acquisitions in the past and anticipate that a portion of our future growth may come from strategic tuck-in acquisitions. The success of any acquisition will depend upon, among other things, our ability to effectively integrate acquired personnel, operations, products and technologies into our business and to retain the key personnel and customers of our acquired businesses. In addition, we may be unable to identify suitable acquisition

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opportunities or obtain any necessary financing on commercially acceptable terms. We may also spend time and money investigating and negotiating with potential acquisition targets but not complete the transaction. Any acquisition could involve other risks, including, among others, the assumption of additional liabilities and expenses, difficulties and expenses in connection with integrating the acquired companies and achieving the expected benefits, issuances of potentially dilutive securities or interest-bearing debt, loss of key employees of the acquired companies, transaction expenses, diversion of management's attention from other business concerns and, with respect to the acquisition of international companies, the inability to overcome differences in international business practices, language and customs. Our failure to successfully integrate potential future acquisitions could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Potential future investments in our customers' businesses or drugs could have a negative impact on our financial results.

          Although we historically have not engaged in business transactions with our customers other than to provide our services, we may in the future enter into arrangements with our customers or other drug companies in which we take on some of the risk of the potential success or failure of their businesses or drugs, including making strategic investments in our customers or other drug companies, providing financing to customers or other drug companies or acquiring an interest in the revenues from customers' drugs or in entities developing a limited number of drugs. Our financial results would be adversely affected if any such investments or the underlying drugs result in losses or do not achieve the level of success that we anticipate and/or our return or payment from any such drug investment or financing is less than our direct and indirect costs with respect to these arrangements.

Our relationships with existing or potential customers who are in competition with each other may adversely impact the degree to which other customers or potential customers use our services, which may adversely affect our business, financial condition, results of operations or cash flows.

          The biopharmaceutical industry is highly competitive, with biopharmaceutical companies each seeking to persuade payers, providers and patients that their drug therapies are better and more cost-effective than competing therapies marketed or being developed by competing firms. In addition to the adverse competitive interests that biopharmaceutical companies have with each other, biopharmaceutical companies also have adverse interests with respect to drug selection and reimbursement with other participants in the healthcare industry, including payers and providers. Biopharmaceutical companies also compete to be first to market with new drug therapies. We regularly provide services to biopharmaceutical companies who compete with each other, and we sometimes provide services to such customers regarding competing drugs in development. Our existing or future relationships with our biopharmaceutical customers may therefore deter other biopharmaceutical customers from using our services or may result in our customers seeking to place limits on our ability to serve other biopharmaceutical industry participants. In addition, our further expansion into the broader healthcare market may adversely impact our relationships with biopharmaceutical customers, and such customers may elect not to use our services, reduce the scope of services that we provide to them or seek to place restrictions on our ability to serve customers in the broader healthcare market with interests that are adverse to theirs. Any loss of customers or reductions in the level of revenues from a customer could have a material adverse effect on our business, financial condition, results of operations or cash flows.

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Our results of operations may be adversely affected if we fail to realize the full value of our goodwill and intangible assets.

          As of June 30, 2014, we had goodwill and net intangible assets of $766.8 million, which constituted approximately 58% of our total assets at the end of this period. We periodically (at least annually unless triggering events occur that cause an interim evaluation) evaluate goodwill and other acquired intangible assets for impairment. Any future determination requiring the write off of a portion of our goodwill or other acquired intangible assets could adversely affect our business, financial condition, and results of operations. If we are not able to realize the value of the goodwill and indefinite-lived intangible assets, we may be required to incur material charges relating to the impairment of those assets. During the year ended December 31, 2012, we recorded a goodwill impairment charge of $4.0 million associated with our Phase I Services reporting unit. Additionally, during the second quarter of 2014, we recorded an impairment of our intangible assets of $8.0 million and our goodwill of $9.2 million associated with our Phase I Services and Global Consulting reporting units. Such impairment charges in the future could materially and adversely affect our business, financial condition, results of operations and cash flows.

We face risks arising from the restructuring of our operations which could adversely affect our business, financial condition, results of operations, cash flows or reputation.

          From time to time, we have adopted cost savings initiatives to improve our operating efficiency through various means such as reduction of overcapacity, primarily in our costs of services (billable) function, or other realignment of resources. For example, in March 2013, we adopted a plan to better align headcount and costs with current geographic sources and mix of revenue. The plan was completed by December 31, 2013 and involved the elimination of approximately 325 employee and contract positions. Similarly, in March 2012, in addition to synergies directly related to our acquisition of Kendle, we initiated a restructuring plan to align headcount with our existing book of business that led to a reduction in global headcount of approximately 250 employees. In order to realize the synergies related to our acquisition of Kendle and the cost savings from these additional staff realignment initiatives, we incurred significant one-time costs, which consist primarily of severance, retention bonuses, professional fees, IT transition costs, facility closure costs, legal expenses and various other costs. During the years ended December 31, 2013 and December 31, 2012, we incurred total pre-tax charges of $11.8 million and $35.4 million, respectively, associated with our restructuring initiatives. Restructuring presents significant potential risks of events occurring that could adversely affect us, including a decrease in employee morale, a greater number of employment claims, the failure to achieve targeted cost savings and the failure to meet operational targets and customer requirements due to the loss of employees and any work stoppages that might occur, which, individually or in aggregate, could have a material adverse effect on our business, financial condition, results of operations, cash flows or reputation.

We operate in many different jurisdictions and we could be adversely affected by violations of the FCPA, UK Bribery Act of 2010 and/or similar worldwide anti-corruption laws.

          The FCPA, UK Bribery Act of 2010 and similar worldwide anti-corruption laws prohibit companies and their intermediaries from making improper payments for the purpose of obtaining or retaining business. Our internal policies mandate compliance with these anti-corruption laws. We operate in many parts of the world that have experienced corruption to some degree and, in certain circumstances, anti-corruption laws have appeared to conflict with local customs and practices. Despite our training and compliance programs, we cannot assure that our internal control policies and procedures will protect us from acts in violation of anti-corruption laws committed by persons associated with us, and our continued expansion outside the United States, including in developing countries, could increase such risk in the future. Violations of the FCPA or other non-U.S. anti-corruption laws, or even allegations of such violations, could disrupt our business and result in

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a material adverse effect on our financial condition, results of operations, cash flows and reputation. For example, violations of anti-corruption laws can result in restatements of, or irregularities in, our financial statements as well as severe criminal or civil sanctions. In some cases, companies that violate the FCPA might be debarred by the U.S. government and/or lose their U.S. export privileges. In addition, U.S. or other governments might seek to hold us liable for successor liability FCPA violations or violations of other anti-corruption laws committed by companies that we acquire or in which we invest. Changes in anti-corruption laws or enforcement priorities could also result in increased compliance requirements and related costs which could adversely affect our business, financial condition, results of operations and cash flows.

The failure of third parties to provide us critical support services could adversely affect our business, financial condition, results of operations, cash flows or reputation.

          We depend on third parties for support services vital to our business. Such support services include, but are not limited to, laboratory services, third-party transportation and travel providers, freight forwarders and customs brokers, drug depots and distribution centers, suppliers or contract manufacturers of drugs for patients participating in clinical trials, and providers of licensing agreements, maintenance contracts or other services. In addition, we also rely on third-party CROs and other contract clinical personnel for clinical services either in regions where we have limited resources, or in cases where demand cannot be met by our internal staff. The failure of any of these third parties to adequately provide us critical support services could have a material adverse effect on our business, financial condition, results of operations, cash flows or reputation.

The operation of our Phase I clinical facility and the services we provide there including direct interaction with clinical trial patients or volunteers could create potential liability that may adversely affect our business, financial condition, results of operations, cash flows and reputation.

          We operate one facility where Phase I clinical trials are conducted. Phase I clinical trials ordinarily involve testing an investigational drug on a limited number of healthy individuals, typically 20 to 120 persons, to evaluate its safety, determine a safe dosage range and identify side effects. Some of these trials involve the administration of investigational drugs to known substance abusers. Failure to operate such a facility in accordance with applicable regulations could result in that facility being shut down, which could disrupt our operations and adversely affect our business, financial condition, results of operations, cash flows and reputation. Additionally, we face risks resulting from the administration of drugs to volunteers, including adverse events, and the professional malpractice of medical care providers. We also directly employ nurses and other trained employees who assist in implementing the testing involved in our clinical trials, such as drawing blood from healthy volunteers. Any professional malpractice or negligence by such principal investigators, nurses or other employees could potentially result in liability to us in the event of personal injury to or death of a volunteer in clinical trials. This liability, particularly if it were to exceed the limits of any indemnification agreements and insurance coverage we may have, may adversely affect our business and financial condition, results of operations, cash flows and reputation.

Risks Related to Our Industry

We face intense competition in many areas of our business and, if we do not compete effectively, our business may be harmed.

          The CRO industry is highly competitive. We often compete for business with other CROs and internal development departments, some of which could be considered large CROs in their own right. We also compete with universities and teaching hospitals. Some of these competitors have greater financial resources and a wider range of service offerings over a greater geographic area

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than we do. If we do not compete successfully, our business will suffer. The industry is highly fragmented, with numerous smaller specialized companies and a handful of full-service companies with global capabilities similar to ours. Increased competition has led to price and other forms of competition, such as acceptance of less favorable contract terms, which could adversely affect our operating results. In recent years our industry has experienced consolidation and a number of "going private" transactions. This trend is likely to produce more competition from the resulting larger companies, and ones without the cost pressures of being public, for both customers and acquisition candidates. In addition, there are few barriers to entry for smaller specialized companies considering entering the industry. Because of their size and focus, small CROs might compete effectively against larger companies such as us, especially in lower cost geographic areas, which could have a material adverse effect on our business.

Outsourcing trends in the biopharmaceutical industry and changes in aggregate spending and research and development budgets could adversely affect our operating results and growth rate.

          Our revenues depend on the level of R&D expenditures, size of the drug-development pipelines and outsourcing trends of the biopharmaceutical industry, including the amount of such R&D spend that is outsourced and subject to competitive bidding among CROs. Accordingly, economic factors and industry trends that affect biopharmaceutical companies affect our business. Biopharmaceutical companies continue to seek long-term strategic collaborations with global CROs with favorable pricing terms. Competition for these collaborations is intense and we might not be selected, in which case a competitor may enter into the collaboration and our business with the customer, if any, may be limited. Our success depends in part on our ability to establish and maintain preferred provider relationships with large biopharmaceutical companies. Our failure to develop or maintain these preferred provider relationships could have a material adverse effect on our business and results of operations. Furthermore, in order to obtain preferred provider relationships, we may have to reduce the prices for our services, which could negatively impact our gross margin for these services.

          In addition, if the biopharmaceutical industry reduces its outsourcing of clinical trials or such outsourcing fails to grow at projected rates, our business, financial condition, results of operations and cash flows could be materially and adversely affected. We may also be negatively impacted by consolidation and other factors in the biopharmaceutical industry, which may slow decision making by our customers, result in the delay or cancellation of existing projects, cause reductions in overall R&D expenditures, or lead to increased pricing pressures. Further, in the event that one of our customers combines with a company that is using the services of one of our competitors, the combined company could decide to use the services of that competitor or another provider. All of these events could adversely affect our business, financial condition, cash flows or results of operations.

If we fail to comply with federal, state, and foreign healthcare laws, including fraud and abuse laws, we could face substantial penalties and our business, financial condition, results of operations, cash flows and prospects could be adversely affected.

          Even though we do not and will not order healthcare services or bill directly to Medicare, Medicaid or other third-party payers, certain federal and state healthcare laws and regulations pertaining to fraud and abuse are and will be applicable to our business. We could be subject to healthcare fraud and abuse laws of both the federal government and the states in which we conduct our business. Because of the breadth of these laws and the narrowness of available statutory and regulatory exceptions, it is possible that some of our business activities could be subject to challenge under one or more of such laws. If we or our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us,

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we may be subject to penalties, including civil and criminal penalties, damages, fines, imprisonment, and the curtailment or restructuring of our operations, any of which could materially adversely affect our ability to operate our business and our financial results.

We may be affected by healthcare reform and potential additional reforms which may adversely impact the biopharmaceutical industry and reduce the need for our services or negatively impact our profitability.

          Numerous government bodies are considering or have adopted healthcare reforms and may undertake, or are in the process of undertaking, efforts to control healthcare costs through legislation, regulation and agreements with healthcare providers and biopharmaceutical companies, including many of our customers. By way of example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or, collectively, the Affordable Care Act, was signed into law. Among other things, this law imposes cost-containment measures intended to reduce or constrain the growth of healthcare spending, enhances remedies against healthcare fraud and abuse, adds new requirements for biopharmaceutical companies to disclose payments to physicians, including principal investigators, imposes new taxes and fees on biopharmaceutical manufacturers and imposes additional health policy reforms. We are uncertain as to the full effect of these reforms on our business at this time and are unable to predict what legislative proposals, if any, will be adopted in the future. If regulatory cost-containment efforts limit the profitability of new drugs by, for example, continuing to place downward pressure on pharmaceutical pricing and/or increasing regulatory burdens and operating costs of the biopharmaceutical industry, our customers may reduce their R&D spending, which could reduce the business they outsource to us. Similarly, if regulatory requirements are relaxed or simplified drug approval procedures are adopted, the demand for our services could decrease.

          In addition, government bodies have adopted and may continue to adopt new healthcare legislation or regulations that are more burdensome than existing regulations. For example, product safety concerns and recommendations by the Drug Safety Oversight Board could change the regulatory environment for drug products, and new or heightened regulatory requirements may increase our expenses or limit our ability to offer some of our services. We might have to incur additional costs to comply with these or other new regulations, and failure to comply could harm our financial condition, results or operations, cash flows, and reputation. Additionally, new or heightened regulatory requirements may have a negative impact on the ability of our customers to conduct industry-sponsored clinical trials, which could reduce the need for our post-approval development services.

Current and proposed laws and regulations regarding the protection of personal data could result in increased risks of liability or increased cost to us or could limit our service offerings.

          The confidentiality, collection, use and disclosure of personal data, including clinical trial patient-specific information, are subject to governmental regulation generally in the country in which the personal data was collected or used. For example, U.S. federal regulations under the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health, or HITECH, Act, or collectively, HIPAA, generally require individuals' written authorization, in addition to any required informed consent, before protected health information, or PHI, may be used for research and such regulations specify standards for de-identifications and for limited data sets. We may also be subject to applicable state privacy and security laws and regulations in states in which we operate. We are indirectly affected by the privacy provisions surrounding individual authorizations because many principal investigators with whom we are involved in clinical trials are directly subject to them as a HIPAA "covered entity." In addition, we obtain identifiable health information from third parties that are subject to such

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regulations. While we do not believe we are a "business associate" under HIPAA, regulatory agencies may disagree. Because of amendments to the HIPAA data security and privacy rules that were promulgated on January 25, 2013, some of which went into effect on March 26, 2013, there are some instances where HIPAA "business associates" of a "covered entity" may be directly liable for breaches of PHI and other HIPAA violations. These amendments may subject "business associates" to HIPAA's enforcement scheme, which, as amended, can yield up to $1.5 million in annual civil penalties for each HIPAA violation.

          In the European Union, or EU, personal data includes any information that relates to an identified or identifiable natural person with health information carrying additional obligations, including obtaining the explicit consent from the individual for collection, use or disclosure of the information. In addition, we are subject to EU rules with respect to cross-border transfers of such data out of the EU. The United States, the EU and its member states, and other countries where we have operations, such as Japan, South Korea, Malaysia, the Philippines, Russia and Singapore, continue to issue new privacy and data protection rules and regulations that relate to personal data and health information. Failure to comply with certain certification/registration and annual re-certification/registration provisions associated with these data protection and privacy regulations and rules in various jurisdictions, or to resolve any serious privacy or security complaints, could subject us to regulatory sanctions, delays in clinical trials, criminal prosecution or civil liability. Federal, state and foreign governments may propose or have adopted additional legislation governing the collection, possession, use or dissemination of personal data, such as personal health information, and personal financial data as well as security breach notification rules for loss or theft of such data. Additional legislation or regulation of this type might, among other things, require us to implement new security measures and processes or bring within the legislation or regulation de-identified health or other personal data, each of which may require substantial expenditures or limit our ability to offer some of our services. Additionally, if we violate applicable laws, regulations or duties relating to the use, privacy or security of personal data, we could be subject to civil liability or criminal prosecution, be forced to alter our business practices and suffer reputational harm. In the next few years, the European data protection framework may be revised as a generally applicable data regulation. The text has not yet been finalized, but it contains new provisions specifically directed at the processing of health information, sanctions of up to 2% of worldwide gross revenue and extra-territoriality measures intended to bring non-EU companies under the proposed regulation.

Actions by regulatory authorities or customers to limit the scope of or withdraw an approved drug from the market could result in a loss of revenue.

          Government regulators have the authority, after approving a drug or device, to limit its indication for use by requiring additional labeled warnings or to withdraw the drug or device's approval for its approved indication based on safety concerns. Similarly, customers may act to voluntarily limit the availability of approved drugs or devices or withdraw them from the market after we begin our work. If we are providing services to customers for drugs or devices that are limited or withdrawn, we may be required to narrow the scope of or terminate our services with respect to such drugs or devices, which would prevent us from earning the full amount of service revenue anticipated under the related service contracts.

If we do not keep pace with rapid technological change, our services may become less competitive or obsolete.

          The biopharmaceutical industry generally, and drug development and clinical research more specifically, are subject to rapid technological change. Our current competitors or other businesses might develop technologies or services that are more effective or commercially attractive than, or render obsolete, our current or future technologies and services. If our competitors introduce

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superior technologies or services and if we cannot make enhancements to remain competitive, our competitive position would be harmed. If we are unable to compete successfully, we may lose customers or be unable to attract new customers, which could lead to a decrease in our revenue and have an adverse impact on our financial condition.

          In addition, the operation of our business relies on IT infrastructure and systems delivered across multiple platforms. The failure of our systems to perform could severely disrupt our business and adversely affect our results of operations. Our systems are also vulnerable to demise from natural or manmade disasters, terrorist attacks, computer viruses or hackers, power loss or other technology system failures. These events could adversely affect our business or results of operations.

Risks Related to Our Indebtedness

Our substantial debt could adversely affect our financial condition.

          On a pro forma basis, after giving effect to this offering, the refinancing of our senior secured credit facilities and the use of proceeds therefrom, as of June 30, 2014, our total principal amount of indebtedness would have been approximately $         . In addition, we would have had up to $         of additional borrowing capacity available under our senior secured facilities. Our substantial indebtedness could adversely affect our financial condition and thus make it more difficult for us to satisfy our obligations with respect to our senior secured facilities. If our cash flow is not sufficient to service our debt and adequately fund our business, we may be required to seek further additional financing or refinancing or dispose of assets. We might not be able to influence any of these alternatives on satisfactory terms or at all. Our substantial indebtedness could also:

    increase our vulnerability to adverse general economic, industry or competitive developments;

    require us to dedicate a more substantial portion of our cash flows from operations to payments on our indebtedness, thereby reducing the availability of our cash flows to fund working capital, investments, acquisitions, capital expenditures, and other general corporate purposes;

    limit our ability to make required payments under our existing contractual commitments, including our existing long-term indebtedness;

    limit our ability to fund a change of control offer;

    require us to sell certain assets;

    restricting us from making strategic investments, including acquisitions or causing us to make non-strategic divestitures;

    limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

    place us at a competitive disadvantage compared to our competitors that have less debt;

    cause us to incur substantial fees from time to time in connection with debt amendments or refinancings;

    increase our exposure to rising interest rates because a portion of our borrowings is at variable interest rates; and

    limit our ability to borrow additional funds or to borrow on terms that are satisfactory to us.

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Despite our level of indebtedness, we are able to incur more debt and undertake additional obligations. Incurring such debt or undertaking such additional obligations could further exacerbate the risks to our financial condition.

          We may be able to incur substantial additional indebtedness in the future. Although covenants under the credit agreement governing our senior secured facilities limit our ability to incur certain additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the indebtedness incurred in compliance with these restrictions could be substantial. To the extent we incur additional indebtedness, the risks associated with our leverage described above, including our possible inability to service our debt obligations would increase.

Servicing our debt will require a significant amount of cash, and our ability to generate sufficient cash depends on many factors, some of which are beyond our control.

          Our ability to make payments on and refinance our debt, make strategic acquisitions and to fund capital expenditures depends on our ability to generate cash flow in the future. To some extent, our ability to generate future cash flow is subject to general economic, financial, competitive and other factors that are beyond our control. We cannot assure you that:

    our business will generate sufficient cash flow from operations;

    we will continue to realize the cost savings, revenue growth and operating improvements that resulted from the execution of our long-term strategic plan; or

    future sources of funding will be available to us in amounts sufficient to enable us to fund our liquidity needs.

          We also may experience difficulties repatriating cash from foreign subsidiaries and accounts due to law, regulation or contracts which could further constrain our liquidity. If we cannot fund our liquidity needs, we will have to take actions such as reducing or delaying capital expenditures, marketing efforts, strategic acquisitions, investments and alliances, selling assets, restructuring or refinancing our debt or seeking additional equity capital. We cannot assure you that any of these remedies could, if necessary, be effected on commercially reasonable or favorable terms, or at all, or that they would permit us to meet our scheduled debt service obligations. Any inability to generate sufficient cash flow or refinance our debt on favorable terms could have a material adverse effect on our financial condition. In addition, if we incur additional debt, the risks associated with our substantial leverage, including the risk that we will be unable to service our debt or generate enough cash flow to fund our liquidity needs, could intensify.

Covenant restrictions under our senior secured facilities may limit our ability to operate our business.

          The agreement governing our senior secured facilities contains covenants that may restrict our ability to, among other things, borrow money, pay dividends, make capital expenditures, make strategic acquisitions and effect a consolidation, merger or disposal of all or substantially all of our assets. Although the covenants in our senior secured facilities are subject to various exceptions, we cannot assure you that these covenants will not adversely affect our ability to finance future operations or capital needs or to engage in other activities that may be in our best interest. In addition, in certain circumstances, our long-term debt requires us to maintain a specified financial ratio and satisfy certain financial condition tests, which may require that we take action to reduce our debt or to act in a manner contrary to our business objectives. A breach of any of these covenants could result in a default under our senior secured facilities. If an event of default under our senior secured facilities occurs, the lenders thereunder could elect to declare all amounts outstanding thereunder, together with accrued interest, to be immediately due and payable. In such

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case, we might not have sufficient funds to repay all the outstanding amounts. In addition, our senior secured facilities are secured by first priority security interests on substantially all of our real and personal property, including the capital stock of certain of our subsidiaries. If an event of default under our senior secured facilities occurs, the lenders thereunder could exercise their rights under the related security documents. Any acceleration of amounts due under the senior secured facilities or the substantial exercise by the lenders of their rights under the security documents would likely have a material adverse effect on us.

Interest rate fluctuations may have a material adverse effect on our business, financial condition, results of operations and cash flows.

          Because we have variable rate debt, fluctuations in interest rates may affect our business, financial condition, results of operations and cash flows. We may attempt to minimize interest rate risk and lower our overall borrowing costs through the utilization of derivative financial instruments, primarily interest rate swaps. As of June 30, 2014 we had approximately $291.0 million of total indebtedness with variable interest rates that only vary to the extent the three month LIBOR is over one percent.

Risks Related to Our Class A Common Stock and this Offering

We will incur increased costs and obligations as a result of being a public company.

          As a privately held company, we were not required to comply with certain corporate governance and financial reporting practices and policies required of a publicly traded company. As a publicly traded company, we will incur significant legal, accounting and other expenses that we were not required to incur as a privately held company, particularly after we are no longer an emerging growth company as defined under the JOBS Act. After this offering, we will be required to comply with the requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley, the Dodd-Frank Act, the listing requirements of the NASDAQ Global Market, or the NASDAQ, and other applicable securities rules and regulations. The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and operating results with the SEC. We will also be required to ensure that we have the ability to prepare financial statements that are fully compliant with all SEC reporting requirements on a timely basis. We expect to incur additional annual expenses of $3.0 million to $5.0 million related to these steps and, among other things, additional directors' and officers' liability insurance, director fees, transfer agent fees, hiring additional accounting, legal and administrative personnel, increased auditing and legal fees and similar expenses. Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources. As a public company, we will, among other things:

    prepare and distribute periodic public reports and other stockholder communications in compliance with our obligations under the federal securities laws and applicable NASDAQ rules;

    create or expand the roles and duties of our board of directors, or our Board, and committees of the Board;

    institute more comprehensive financial reporting and disclosure compliance functions;

    enhance our investor relations function;

    establish new internal policies, including those relating to disclosure controls and procedures; and

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    involve and retain to a greater degree outside counsel and accountants in the activities listed above.

These changes will require a significant commitment of additional resources. We might not be successful in complying with these obligations and the significant commitment of resources required for complying with them could have a material adverse effect on our business, financial condition, results of operations and cash flows.

The requirements applicable to public companies may strain our resources and divert management's attention.

          Following the consummation of this offering, we will be subject to various regulatory and reporting requirements, including those of the SEC and the NASDAQ. These requirements include record keeping, financial reporting and corporate governance rules and regulations. Our internal infrastructure might not be adequate to support our increased reporting obligations, and we may be unable to hire, train or retain necessary staff and may be reliant on engaging outside consultants or professionals to overcome our lack of internal resources or other resources. If our internal infrastructure is inadequate, we are unable to engage outside consultants or are otherwise unable to fulfill our public company obligations, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.

          The changes necessitated by becoming a public company require a significant commitment of resources and management oversight that has increased and may continue to increase our costs and might place a strain on our systems and resources. As a result, our management's attention might be diverted from other business concerns. If we fail to maintain an effective internal control environment or to comply with the numerous legal and regulatory requirements imposed on public companies, we could make material errors in, and be required to restate, our financial statements. Any such restatement could result in a loss of public confidence in the reliability of our financial statements and sanctions imposed on us by the SEC, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our internal control over financial reporting does not currently meet the standards required by Section 404 of Sarbanes-Oxley, and failure to achieve and maintain effective internal control over financial reporting in accordance with Section 404 of Sarbanes-Oxley could have a material adverse effect on our stock price, reputation, business, financial condition, results of operations and cash flows.

          As a privately held company, we have not been required to evaluate our internal control over financial reporting in a manner that meets the standards of publicly traded companies required by Section 404 of Sarbanes-Oxley. Section 404 of Sarbanes-Oxley requires annual management assessments of the effectiveness of our internal control over financial reporting, starting with the second annual report that we file with the SEC as a public company, and generally requires in the same report a report by our independent registered public accounting firm on the effectiveness of our internal control over financial reporting. However, under the recently enacted JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of Sarbanes-Oxley until we are no longer an emerging growth company. Once we are no longer an emerging growth company, our independent registered public accounting firm will be required to attest to the effectiveness of our internal control over financial reporting on an annual basis. The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation of our existing controls and the incurrence of significant additional expenditures.

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          We are in the process of designing, implementing, and testing the internal control over our financial reporting in order to comply with this obligation, which process is time consuming, costly, and complicated. In connection with the implementation of the necessary procedures and practices related to internal control over financial reporting, we may identify deficiencies that cause us to incur significant costs and cause distractions from our business objectives and we might not be able to remediate deficiencies in time to meet the deadlines imposed by Sarbanes-Oxley for compliance with the requirements of Section 404. In addition, we may encounter problems or delays in completing the implementation of any required improvements and receiving a favorable attestation in connection with the attestation provided by our independent registered public accounting firm. Further, material weaknesses or significant deficiencies in our internal controls over financial reporting may exist or otherwise be discovered in the future. We will be unable to issue securities in the public markets through the use of a shelf registration statement if we are not in compliance with the applicable provisions of Section 404. Furthermore, failure to achieve and maintain an effective internal control environment could limit our ability to report our financial results accurately and timely, result in misstatements and restatements of our consolidated financial statements, cause investors to lose confidence and have a material adverse effect on our stock price, reputation, business, financial condition, results of operations and cash flows.

We are a holding company and rely on dividends and other payments, advances and transfers of funds from our subsidiaries to meet our obligations and pay any dividends.

          We have no direct operations and no significant assets other than ownership of 100% of the capital stock of our subsidiaries. Because we conduct our operations through our subsidiaries, we depend on those entities for dividends and other payments to generate the funds necessary to meet our financial obligations, and to pay any dividends with respect to our Class A common stock. Legal and contractual restrictions in our senior secured facilities and other agreements which may govern future indebtedness of our subsidiaries, as well as the financial condition and operating requirements of our subsidiaries, may limit our ability to obtain cash from our subsidiaries. The earnings from, or other available assets of, our subsidiaries might not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on our Class A common stock or other obligations. Any of the foregoing could materially and adversely affect our business, financial condition, results of operations and cash flows.

We are an emerging growth company, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Class A common stock less attractive to investors.

          As an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to obtain an assessment of the effectiveness of our internal controls over financial reporting from our independent registered public accounting firm pursuant to Section 404 of Sarbanes-Oxley, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. To the extent we choose to do so, our financial statements might not be comparable to companies that comply with such new or revised accounting standards. We cannot predict if investors will find our Class A common stock less attractive because we will rely on these exemptions. If some investors find our Class A common stock less attractive as a result, there may be a less active trading market for our Class A common stock and the market price of our Class A common stock may be more volatile.

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We are a "controlled company" within the meaning of the NASDAQ rules and, as a result, we will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. Our stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements.

          Following this offering, the Sponsors will together continue to control a majority of the voting power of our outstanding Class A common stock. As a result, we are a "controlled company" within the meaning of the corporate governance standards of the NASDAQ. Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements, including:

    the requirement that a majority of our Board consist of independent directors;

    the requirement that we have a nominating/corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities, or otherwise have director nominees selected by vote of a majority of the independent directors;

    the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and

    the requirement for an annual performance evaluation of the nominating/corporate governance and compensation committees.

Following this offering, we intend to utilize these exemptions. As a result, we will not have a majority of independent directors, our nominating and corporate governance committee and compensation committee will not consist entirely of independent directors and such committees will not be subject to annual performance evaluations. Additionally, we only are required to have one independent audit committee member upon the listing of our Class A common stock on the NASDAQ, a majority of independent audit committee members within 90 days from the date of listing and all independent audit committee members within one year from the date of listing. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NASDAQ.

          The Sponsors are not subject to any contractual obligation to retain their controlling interest, except that they have agreed, subject to certain exceptions, not to sell or otherwise dispose of any shares of our Class A common stock or other capital stock or other securities exercisable or convertible therefor for a period of at least 180 days after the date of this prospectus without the prior written consent of the representatives of the underwriters in this offering. Except for this brief period, there can be no assurance as to the period of time during which the Sponsors will maintain their ownership of our Class A common stock following the offering. As a result, there can be no assurance as to the period of time during which we will be able to avail ourselves of the controlled company exemptions.

Our Sponsors will effectively control our company, and their interests may be different from or conflict with those of our other stockholders.

          After the consummation of this offering, the Sponsors will collectively beneficially own         % of our outstanding Class A common stock, or         % of our outstanding Class A common stock if the underwriters fully exercise their option to purchase additional shares. As a consequence, the Sponsors will be able to exert a significant degree of influence or actual control over our management and affairs and will control matters requiring stockholder approval, including the election of directors, a merger, consolidation or sale of all or substantially all of our assets, and any

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other significant transaction. Additionally, the Sponsors are and, following the completion of this offering, will continue to be parties to a stockholders agreement, or the Stockholders Agreement. The Stockholders Agreement, among other things, imposes certain transfer restrictions on the shares held by such stockholders and requires such stockholders to vote in favor of certain nominees to our Board. For a discussion of the Stockholders Agreement, see "Certain Relationships and Related Person Transactions." The interests of the Sponsors might not always coincide with our interests or the interests of our other stockholders. For instance, this concentration of ownership and/or the restrictions imposed by the Stockholders Agreement may have the effect of delaying or preventing a change in control of us otherwise favored by our other stockholders and could depress our stock price.

          The Sponsors each make investments in companies and may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with us. The Sponsors may also pursue, for its own accounts, acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities might not be available to us. Our organizational documents contain provisions renouncing any interest or expectancy held by our directors affiliated with the Sponsors in certain corporate opportunities. Accordingly, the interests of the Sponsors may supersede ours, causing the Sponsors or their affiliates to compete against us or to pursue opportunities instead of us, for which we have no recourse. Such actions on the part of the Sponsors and inaction on our part could have a material adverse effect on our business, financial condition, results of operations and cash flows.

          Upon the consummation of this offering, nominees of the Sponsors will occupy         seats on our Board. Since the Sponsors could invest in entities that directly or indirectly compete with us, when conflicts arise between the interests of the Sponsors and the interests of our stockholders, these directors may not be disinterested.

Provisions of our corporate governance documents and Delaware law could make an acquisition of our company more difficult and may prevent attempts by our stockholders to replace or remove our current management, even if beneficial to our stockholders.

          Provisions of our amended and restated certificate of incorporation and our amended and restated bylaws will contain provisions that delay, defer or discourage transactions involving an actual or potential change in control of us or change in our management that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our Class A common stock, thereby depressing the market price of our Class A common stock. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board. Because our Board is responsible for appointing the members of our management team, these provisions could in turn affect any attempt to replace current members of our management team. Among others, these provisions include, (1) our ability to issue preferred stock without stockholder approval, (2) the requirement that our stockholders may not act without a meeting, (3) requirements for advance notification of stockholder nominations and proposals contained in our bylaws, (4) the absence of cumulative voting for our directors, (5) requirements for stockholder approval of certain business combinations and (6) the limitations on director nominations contained in our Stockholders Agreement. See "Description of Capital Stock" for more detail.

          Additionally, Section 203 of the Delaware General Corporation Law, or the DGCL, prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder, generally a person which together with its affiliates owns, or within the last three years has owned, 15% of our voting stock, for a period of three years after the date of the transaction in

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which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. The existence of the foregoing provision could also limit the price that investors might be willing to pay in the future for shares of our Class A common stock, thereby depressing the market price of our Class A common stock.

There is no existing market for our Class A common stock, and we do not know if one will develop to provide you with adequate liquidity.

          Prior to this offering, there has not been a public market for our Class A common stock. An active market for our Class A common stock might not develop following the consummation of this offering, or if it does develop, might not be maintained. If an active trading market does not develop, you may have difficulty selling any of our Class A common stock that you buy. The initial public offering price for the shares of our Class A common stock will be determined by negotiations between us and the representatives of the underwriters and might not be indicative of prices that will prevail in the open market following this offering. Consequently, you might not be able to sell shares of our Class A common stock at prices equal to or greater than the initial public offering price.

Our stock price might fluctuate significantly, which could cause the value of your investment in our Class A common stock to decline, and you might not be able to resell your shares at a price at or above the initial public offering price.

          Securities markets worldwide have experienced, and are likely to continue to experience, significant price and volume fluctuations. This market volatility, as well as general economic, market or political conditions, could reduce the market price of our Class A common stock regardless of our results of operations. The trading price of our Class A common stock is likely to be volatile and subject to significant price fluctuations in response to many factors, including:

    market conditions or trends in our industry, including with respect to the regulatory environment, or the economy as a whole;

    fluctuations in quarterly operating results, as well as differences between our actual financial and operating results and those expected by investors;

    changes in key personnel;

    entry into new markets;

    announcements by us or our competitors of new service offerings or significant acquisitions, divestitures, strategic partnerships, joint ventures or capital commitments;

    actions by competitors;

    changes in operating performance and stock market valuations of other companies;

    investors' perceptions of our prospects and the prospects of the industry;

    the public's response to press releases or other public announcements by us or third parties, including our filings with the SEC;

    announcements related to litigation;

    guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;

    changes in financial estimates or ratings by any securities analysts who follow our Class A common stock, our failure to meet these estimates or the failure of those analysts to initiate or maintain coverage of our Class A common stock;

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    changes in the credit ratings of our debt;

    the development and sustainability of an active trading market for our Class A common stock;

    investor perceptions of the investment opportunity associated with our Class A common stock relative to other investment alternatives;

    future sales of our Class A common stock by our officers, directors and significant stockholders;

    other events or factors, including those resulting from system failures and disruptions, earthquakes, hurricanes, war, acts of terrorism, other natural disasters or responses to these events; and

    changes in accounting principles.

These and other factors may cause the market price and demand for shares of our Class A common stock to fluctuate substantially, which may limit or prevent investors from readily selling their shares of our Class A common stock and may otherwise negatively affect the liquidity of our Class A common stock. In that event, the price of our Class A common stock would likely decrease. In the past, when the market price of a stock has been volatile, security holders have often instituted class action litigation against the company that issued the stock. If we become involved in this type of litigation, regardless of the outcome, we could incur substantial legal costs and our management's attention could be diverted from the operation of our business, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Future sales of our Class A common stock in the public market could cause the market price of our Class A common stock to decrease significantly.

          Sales of substantial amounts of our Class A common stock in the public market following this offering by our existing stockholders, upon the exercise of stock options granted or by persons who acquire shares in this offering may cause the market price of our Class A common stock to decrease significantly. The perception that such sales could occur could also depress the market price of our Class A common stock. Any such sales could also create public perception of difficulties or problems with our business and might also make it more difficult for us to raise capital through the sale of equity securities in the future at a time and price that we deem appropriate.

          Upon the consummation of this offering, we will have         outstanding shares of Class A common stock, of which:

    shares are shares that we are selling in this offering and, unless purchased by affiliates, may be resold in the public market immediately after this offering; and

    shares will be "restricted securities," as defined under Rule 144 under the Securities Act, and be eligible for sale in the public market subject to the requirements of Rule 144; of these,         shares are subject to lock-up agreements and will become available for resale in the public market beginning 180 days after the date of this prospectus and the remainder will become available for resale in the public market immediately following this offering.

          The lock-up agreements with the underwriters of this offering prohibit a stockholder from selling, contracting to sell or otherwise disposing of any Class A common stock or securities that are convertible or exchangeable for Class A common stock or entering into any arrangement that transfers the economic consequences of ownership of our Class A common stock for at least 180 days from the date of the prospectus filed in connection with this offering, although the

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representatives may, in their sole discretion and at any time without notice, release all or any portion of the securities subject to these lock-up agreements. Upon a request to release any shares subject to a lock-up, the representatives would consider the particular circumstances surrounding the request including, but not limited to, the length of time before the lock-up expires, the number of shares requested to be released, reasons for the request, the possible impact on the market for our Class A common stock and whether the holder of our shares requesting the release is an officer, director or other affiliate of ours. As a result of these lock-up agreements, notwithstanding earlier eligibility for sale under the provisions of Rule 144, none of these shares may be sold until at least 180 days after the date of this prospectus. See "Shares Eligible for Future Sale" and "Underwriting."

          As restrictions on resale expire or as shares are registered, our share price could drop significantly if the holders of these restricted or newly registered shares sell them or are perceived by the market as intending to sell them. These sales might also make it more difficult for us to raise capital through the sale of equity securities in the future at a time and at a price that we deem appropriate.

          See the information under the heading "Shares Eligible for Future Sale" for a more detailed description of the shares that will be available for future sales upon consummation of this offering.

We do not expect to pay any cash dividends for the foreseeable future.

          We do not anticipate that we will pay any dividends to holders of our Class A common stock for the foreseeable future. Any payment of cash dividends will be at the discretion of our Board and will depend on our financial condition, capital requirements, legal requirements, earnings and other factors. Our ability to pay dividends is restricted by the terms of our senior secured facilities and might be restricted by the terms of any indebtedness that we incur in the future. Consequently, you should not rely on dividends in order to receive a return on your investment. See "Dividend Policy."

If securities analysts or industry analysts downgrade our shares, publish negative research or reports, or do not publish reports about our business, our share price and trading volume could decline.

          The trading market for our Class A common stock will be influenced by the research and reports that industry or securities analysts publish about us, our business and our industry. If one or more analysts adversely change their recommendation regarding our shares or our competitors' stock, our share price would likely decline. If one or more analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline. As a result, the market price for our Class A common stock may decline below the initial public offering price and you might not be able to resell your shares of our Class A common stock at or above the initial public offering price.

If you purchase shares of Class A common stock sold in this offering, you will incur immediate and substantial dilution.

          The initial public offering price per share is substantially higher than the pro forma net tangible book value per share immediately after this offering. As a result, you will pay a price per share that substantially exceeds the book value of our assets after subtracting the book value of our liabilities. Based on our pro forma net tangible book value as of June 30, 2014 and assuming an offering price of $             per share, the midpoint of the range set forth on the cover page of this prospectus, you will incur immediate and substantial dilution in the amount of $             per share. See "Dilution."

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

          This prospectus, including the sections entitled "Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Business," contains forward looking statements. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future results of operations and financial position, business strategy and plans and our objectives for future operations, are forward looking statements. The words "believe," "may," "might," "will," "estimate," "continue," "anticipate," "intend," "seek," "plan," "should," "expect" and similar expressions are intended to identify forward looking statements. Examples of forward-looking statements include, but are not limited to, statements we make regarding: (i) trends in R&D spending, outsourcing penetration rates and the incremental growth of the late-stage clinical development services market relative to the overall market; (ii) fast growing therapeutic areas and (iii) the continuous enhancement of our Trusted Process® to deliver superior outcomes. Forward looking statements are based largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short term and long term business operations and objectives, and financial needs. These forward looking statements are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward looking statements we may make. In light of these risks, uncertainties and assumptions, the forward looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward looking statements. We caution you therefore against relying on these forward-looking statements.

          Some of the key factors that could cause actual results to differ from our expectations include regional, national or global political, economic, business, competitive, market and regulatory conditions and the following:

    our failure to generate a large number of new business awards and the risk of delay, termination, reduction in scope or failure to go to contract of our business awards;

    the failure to convert backlog to revenue;

    fluctuation in our results between fiscal quarters and years;

    our history of net losses which may continue;

    the impact of underpricing our contracts, overrunning our cost estimates or failing to receive approval for or experiencing delays with documentation of change orders;

    the risks associated with our information systems infrastructure;

    adverse results from customer or therapeutic area concentration;

    the risks associated with doing business internationally;

    the risks associated with our intercompany transfer pricing policies;

    our failure to successfully increase our market share, grow our business and execute our growth strategies;

    the risks associated with upgrading our information systems and evolving the technology platform for our services;

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    the risks associated with implementing a new version of our Enterprise Resource Planning system;

    failure to perform our services in accordance with contractual requirements, regulatory standards and ethical considerations;

    the risk of litigation and personal injury claims;

    inadequate insurance coverage for our operations and indemnification obligations;

    our failure to attract principal investigators and patients for our clinical trials;

    the risks related to our Phase I Services segment;

    the impact of a failure to retain qualified management and key personnel;

    the impact of unfavorable economic conditions and exchange rate and effective income tax rate fluctuations;

    our limited ability to protect our intellectual property rights;

    the risks associated with potential future acquisitions or investments in our customers' businesses or drugs;

    the risks related to our relationships with existing or potential customers who are in competition with each other;

    potential impairment of goodwill or other intangible assets;

    the risks arising from the restructuring of our operations;

    our inability to compete effectively for the services we provide;

    changes in trends in the biopharmaceutical industry, including our customers reducing their R&D spend or limiting the amount of such spend that is subject to competitive bidding among CROs;

    the impact of changes in government regulations and healthcare reform;

    failure to keep pace with rapid technological changes;

    our ability to service our substantial indebtedness;

    the effect of covenant restrictions in our debt agreements on our ability to operate our business;

    fluctuations in interest rates; and

    the other factors set forth in "Risk Factors."

          The forward looking statements included in this prospectus are made only as of the date hereof. You should not rely upon forward looking statements as predictions of future events. Although we believe that the expectations reflected in the forward looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward looking statements. We undertake no obligation to update publicly any forward looking statements for any reason after the date of this prospectus to conform these statements to actual results or to changes in our expectations, except as may be required by law.

          You should read this prospectus with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.

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CORPORATE REORGANIZATION

          Prior to the consummation of this offering, we will effect a corporate reorganization, whereby our direct, wholly-owned subsidiary, INC Intermediate, will merge with and into us, and we will be the surviving entity of such merger. The corporate reorganization will not affect our operations, which we will continue to conduct through our operating subsidiaries.

          Currently, prior to the reorganization, our authorized capital stock consists of the following:

    Class A common stock, which has full economic rights and which is entitled to one vote per share on all matters subject to a vote of our stockholders other than the election of directors;

    Class B common stock, which has no economic rights other than a redemption value of $0.00002 per share and which is entitled to one vote per share on the election of directors (but no other matters); and

    Class C common stock, all of which is held by Teachers and has no voting or economic rights other than a right for Teachers to receive certain dividends (see "Certain Relationships and Related Person Transactions—Class C Dividend Agreement").

          Except as described below, each share of existing Class A common stock was issued in combination with a share of existing Class B common stock as a "Common Unit." Each Common Unit represents the full set of rights attributable to a typical share of common stock.

          As part of the corporate reorganization that will occur prior to this offering, our authorized capital stock will be as follows:

    new Class A common stock, which will have full economic rights and which will be entitled to one vote per share on all matters subject to a vote of our stockholders, including the election of directors;

    new Class B common stock, which will be identical to the Class A common stock except that it will not carry the right to vote in the election of directors, and which will be convertible (on a one-for-one basis) into Class A common stock at any time at the election of the holder;

    new Class C common stock, which will be identical to our existing Class C common stock; and

    Class D common stock, which will have no economic rights other than a redemption value of $0.00002 per share and which will be entitled to one vote per share on the election of directors (but no other matters), and which will be redeemable by us.

          As part of the merger of INC Intermediate, (i) each currently outstanding share of Class A common stock held by stockholders other than an affiliate of OTPP will be converted into             shares of new Class A common stock, (ii) each currently outstanding share of Class A common stock held by an affiliate of OTPP will be converted into             shares of new Class B common stock, (iii) each currently outstanding share of Class B common stock will be converted into one share of Class D common stock, and (iv) each currently outstanding share of Class C common stock will be converted into one share of new Class C common stock. Following the merger and prior to this offering, we will redeem all of the outstanding shares of new Class C common stock and Class D common stock for $           and $           , respectively, using cash on hand, and subsequent to such redemptions of the new Class C common stock and Class D common stock, we will amend our certificate of incorporation to eliminate the new Class C common stock and the Class D common stock from our authorized capital stock. In addition, as part of the merger, we will also effect a             for 1 reverse stock split of our Class A common stock. Immediately following the merger, an affiliate of OTPP will convert the relevant number of shares of new Class B common stock into new Class A common stock such that affiliates of OTPP hold no more than 30% of the total issued and outstanding new Class A common stock after giving effect to this offering. We refer to these steps as the "corporate reorganization."

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USE OF PROCEEDS

          We estimate that the net proceeds to us from our sale of                  shares of Class A common stock in this offering will be approximately $                  million, after deducting underwriting discounts and commissions and estimated expenses payable by us in connection with this offering. The underwriters may also purchase up to a maximum of                  additional shares of Class A common stock from us pursuant to their option to purchase additional shares. We estimate that the net proceeds to us, if the underwriters exercise their right to purchase the maximum of                  additional shares of Class A common stock from us, will be approximately $                  million, after deducting underwriting discounts and commissions and estimated expenses payable by us in connection with this offering. This assumes a public offering price of $                  per share, which is the midpoint of the price range set forth on the cover of this prospectus.

          We expect to use substantially all of the net proceeds from this offering, $              million of new term loans and approximately $             of cash on our balance sheet to fund the redemption of all of our outstanding Notes and pay related fees and expenses. We expect the repayment of our $300 million outstanding aggregate principal amount of Notes, plus redemption premiums, make-whole interest and related fees and expenses, to result in a cash outflow of $                  upon the consummation of this offering.

          The Notes bear interest at a rate of 11.5% per annum and mature on July 15, 2019. For further disclosure on the Notes, see "Description of Material Indebtedness—Senior Notes."

          This expected use of net proceeds from this offering represents our current intentions based upon our present plans and business conditions. The amounts and timing of our actual expenditures depend on numerous factors, including the ongoing status of and results from our current operating activities, and any unforeseen cash needs. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering.

          Assuming no exercise of the underwriters' option to purchase additional shares, a $1.00 increase (decrease) in the assumed initial public offering price of $                  per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the net proceeds to us from this offering by $                   million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated expenses payable by us.

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DIVIDEND POLICY

          We have not declared or paid cash dividends on our existing Class A common stock or Class B common stock. In the years ended December 31, 2012 and December 31, 2013 and in the six months ended June 30, 2014, we paid dividends of $500,000, $500,000 and $250,000, respectively, to holders of our Class C common stock. We do not intend to pay cash dividends on our Class A common stock or our Class B common stock in the foreseeable future, and we intend to redeem any outstanding shares of Class C common stock in connection with the corporate reorganization. See "Risk Factors—Risks Related to Our Class A Common Stock and this Offering—We do not expect to pay any cash dividends for the foreseeable future" and "Corporate Reorganization." However, in the future, subject to the factors described below and our future liquidity and capitalization, we may change this policy and choose to pay dividends.

          We are a holding company that does not conduct any business operations of our own. As a result our ability to pay cash dividends on our common stock is dependent upon cash dividends and distributions and other transfers from our subsidiaries. The ability of our subsidiaries to pay dividends is currently restricted by the terms of our senior secured facilities, the indenture governing the Notes and may be further restricted by any future indebtedness we or they incur. In addition, under Delaware law, our Board may declare dividends only to the extent of our surplus (which is defined as total assets at fair market value minus total liabilities, minus statutory capital) or, if there is no surplus, out of our net profits for the then current and/or immediately preceding fiscal year.

          Any future determination to pay dividends will be at the discretion of our Board and will take into account:

    restrictions in our debt instruments, including our senior secured facilities and the indenture governing the Notes;

    general economic business conditions;

    our financial condition, results of operations and cash flows;

    our capital requirements;

    our business prospects;

    the ability of our operating subsidiaries to pay dividends and make distributions to us;

    legal restrictions; and

    such other factors as our Board may deem relevant.

          See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources."

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CAPITALIZATION

          The following table sets forth our cash and cash equivalents and our capitalization, as of June 30, 2014:

    on an actual basis;

    on a pro forma basis to give effect to our corporate reorganization immediately prior to the consummation of this offering; and

    on a pro forma as adjusted basis to give effect to our corporate reorganization, the refinancing of our senior secured credit facilities and the sale of                  shares of our Class A common stock in this offering, assuming no exercise of the underwriters' option to purchase additional shares, at an assumed initial offering price of $             per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, and the application of the net proceeds received by us from this offering as described in "Use of Proceeds."

          This table should be read in conjunction with "Use of Proceeds," "Selected and Pro Forma Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Description of Capital Stock" and our financial statements and notes thereto included elsewhere in this prospectus.

 
  As of June 30, 2014  
 
  Actual   Pro Forma   Pro Forma As
Adjusted(1)
 
 
  (dollars in thousands)
 

Cash and cash equivalents

  $ 155,549   $                      $                     
               
               

Debt:

                   

Revolving credit facility(2)

  $   $     $    

Term loan(2)

    291,027              

Senior notes(3)

    300,000              

Capital leases

    1,517              
                   

Total long-term debt, including current portion          

  $ 592,544   $     $    
               

Stockholders' (deficit) equity:

                   

Existing Class A common stock ($0.01 par value, 1,000,000,000 shares authorized, 444,214,400 shares issued and 438,533,400 outstanding on an actual basis; no shares authorized, issued and outstanding on a pro forma basis; and no shares authorized, issued and outstanding on a pro forma as adjusted basis)(4)

  $ 4,442   $     $    

Existing Class B common stock ($0.01 par value, 1,000,000,000 shares authorized, 444,214,400 shares issued and 438,533,400 outstanding on an actual basis;             shares authorized and             shares issued and outstanding on a pro forma basis; and no shares authorized, issued and outstanding on a pro forma as adjusted basis)(4)

    4,442              

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  As of June 30, 2014  
 
  Actual   Pro Forma   Pro Forma As
Adjusted(1)
 
 
  (dollars in thousands)
 

Existing Class C common stock ($0.01 par value, 50 shares authorized and 1 share issued and outstanding on an actual basis;             shares authorized and             shares issued and outstanding on a pro forma basis; and no shares authorized, issued and outstanding on a pro forma as adjusted basis)(4)

                 

New Class A common stock ($0.01 par value, no shares authorized, issued and outstanding on an actual basis;             shares authorized and             shares issued and outstanding on a pro forma basis; and             shares authorized and             shares issued and outstanding on a pro forma as adjusted basis)

                 

New Class B common stock ($0.01 par value, no shares authorized, issued and outstanding on an actual basis;             shares authorized and             shares issued and outstanding on a pro forma basis; and             shares authorized and             shares issued and outstanding on a pro forma as adjusted basis)

                 

New Class C common stock ($0.01 par value, no shares authorized, issued and outstanding on an actual basis;             shares authorized and             shares issued and outstanding on a pro forma basis; and no shares authorized, issued and outstanding on a pro forma as adjusted basis)

                 

Additional paid-in-capital

    474,182              

Treasury stock

    (6,770 )            

Accumulated other comprehensive loss

    (11,943 )            

Accumulated deficit

    (175,326 )            
               

Total stockholders' (deficit) equity

    289,027              
               

Total capitalization

  $ 881,571   $                      $                     
               
               

(1)
Assuming the number of shares sold by us in this offering remains the same, a $1.00 increase or decrease in the assumed initial public offering price of $             per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease our total capitalization by $              million.

(2)
The senior secured facilities provide for a $75.0 million revolving credit facility and a $291.0 million term loan, before $3.5 million of unamortized discounts as of June 30, 2014. As of June 30, 2014, we had no borrowings outstanding and a letter of credit commitment of $0.9 million, giving us approximately $74.1 million of remaining revolver availability outstanding. The outstanding amount of the term loan facility as of June 30, 2014 is $291.0 million. See "Description of Material Indebtedness—Senior Secured Facilities."

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(3)
The senior notes consist of $300.0 million in aggregate principal amount of the Notes issued July 12, 2011. See "Description of Material Indebtedness—Senior Notes."

(4)
Prior to the consummation of this offering, we will effect a corporate reorganization, whereby our direct, wholly-owned subsidiary, INC Intermediate, will merge with and into us, and we will be the surviving entity of such merger. As part of the merger, (i) each currently outstanding share of Class A common stock held by stockholders other than an affiliate of OTPP will be converted into             shares of new Class A common stock, (ii) each currently outstanding share of Class A common stock held by an affiliate of OTPP will be converted into             shares of new Class B common stock, (iii) each currently outstanding share of Class B common stock will be converted into one share of Class D common stock, and (iv) each currently outstanding share of Class C common stock will be converted into one share of new Class C common stock. Following the merger and prior to this offering, we will redeem all of the outstanding shares of new Class C common stock and Class D common stock for $           and $           , respectively, using cash on hand, and subsequent to such redemptions of the new Class C common stock and Class D common stock, we will amend and restate our certificate of incorporation to eliminate the new Class C common stock and the Class D common stock from our authorized common stock. In addition, as part of the merger, we will also effect a                  for 1 reverse stock split of our Class A common stock. Immediately following the merger, an affiliate of OTPP will convert the relevant number of shares of new Class B common stock into new Class A common stock such that affiliates of OTPP hold no more than 30% of the total issued and outstanding new Class A common stock after giving effect to this offering. See "Corporate Reorganization."

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DILUTION

          If you invest in our Class A common stock in this offering, your interest will be diluted to the extent of the difference between the initial public offering price per share of our Class A common stock and the pro forma as adjusted net tangible book value per share of our Class A common stock upon the consummation of this offering. Dilution results from the fact that the per share offering price of our Class A common stock exceeds the book value per share attributable to new investors in this offering.

          Our pro forma net tangible book value as of June 30, 2014 was $             , or $             per share of Class A common stock. Pro forma net tangible book value represents the amount of total tangible assets less total liabilities, and net tangible book value per share represents net tangible book value divided by the number of shares of Class A common stock outstanding, in each case, after giving effect to our corporate reorganization but before giving effect to this offering.

          After giving effect to (i) the sale of                  shares of Class A common stock in this offering at the assumed initial public offering price of $           per share, which is the midpoint of the price range set forth on the cover of this prospectus and (ii) the application of the net proceeds from this offering, our pro forma as adjusted net tangible book value as of June 30, 2014 would have been $            million, or $           per share. This represents an immediate increase in pro forma net tangible book value of $           per share to our existing investors and an immediate dilution in pro forma as adjusted net tangible book value of $           per share to new investors.

          The following table illustrates this dilution on a per share of Class A common stock basis:

Assumed initial public offering price per share of Class A common stock

        $                     

Pro forma net tangible book value per share as of June 30, 2014 before this offering

  $                           

Increase in pro forma net tangible book value per share attributable to new investors

             
             

Pro forma as adjusted net tangible book value per share after this offering

             
             

Dilution in net tangible book value per share to new investors

        $                     
             
             

          The following table summarizes, on a pro forma as adjusted basis as of June 30, 2014 after giving effect to this offering, the total number of shares of Class A common stock purchased from us, the total cash consideration paid to us, or to be paid, and the average price per share paid, or to be paid, by our existing investors and by new investors purchasing shares in this offering, at an assumed initial public offering price of $           per share, which is the midpoint of the range set forth on the cover page of this prospectus, before deducting the estimated underwriting discounts and commissions:

 
  Shares
Purchased
  Total
Consideration
   
 
 
  Average Price Per
Share
 
 
  Number   Percent   Amount   Percent  

Existing stockholders

                                % $                             % $                

New investors

                               
                       

Total

            % $         % $                

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          If the underwriters were to fully exercise their option to purchase           additional shares of our Class A common stock, the percentage of shares of our Class A common stock held by existing investors would be    %, and the percentage of shares of our Class A common stock held by new investors would be    %.

          A $1.00 increase (decrease) in the assumed initial public offering price of $       per share would increase (decrease) our pro forma as adjusted net tangible book value by $        million, the as adjusted net tangible book value per share after this offering by $       and the dilution per share to new investors by $       assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

          The above discussion and tables are based on the number of shares outstanding at June 30, 2014. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities could result in further dilution to our stockholders.

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NON-GAAP FINANCIAL MEASURES

          We report our financial results in accordance with GAAP. To supplement this information, we also use the following non-GAAP financial measures in this prospectus: EBITDA, Adjusted EBITDA, Adjusted Net Income (including diluted Adjusted Net Income per common share) and Adjusted Net Income, giving effect to the offering (including diluted Adjusted Net Income per common share, giving effect to the offering). Management believes that these non-GAAP measures provide useful supplemental information to management and investors regarding the underlying performance of our business operations. We use these non-GAAP measures to, among other things, evaluate our operating performance on a consistent basis, calculate incentive compensation for our employees and assess compliance with various metrics associated with our 2011 Credit Agreement.

          EBITDA represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA, further adjusted to exclude certain expenses that we do not view as part of our core operating results, including management fees that terminate in connection with this offering, acquisition related amortization, restructuring costs, transaction expenses, non-cash stock compensation expense, contingent consideration related to acquisitions, goodwill impairment charges, debt refinancing expenses, and results of and gains or losses from the sale of unconsolidated subsidiaries.

          Adjusted Net Income (including diluted Adjusted Net Income per common share) represents net income (including diluted net income per common share) adjusted to exclude amortization and other expenses that we do not view as part of our core operating results, including management fees that terminate in connection with this offering, acquisition related amortization, restructuring costs, transaction expenses, non-cash stock compensation expense, contingent consideration related to acquisitions, goodwill impairment charges, debt refinancing expenses, results of and gains or losses from the sale of unconsolidated subsidiaries and an adjustment to our tax rate to reflect an expected long-term tax rate which excludes the impact of our valuation allowances and historical net operating losses. Adjusted Net Income, giving effect to the offering (including diluted Adjusted Net Income per common share) represents Adjusted Net Income (including diluted Adjusted Net Income per common share) as further adjusted to reflect adjustments made to calculate pro forma net income (including diluted pro forma net income per common share).

          We believe that EBITDA is a useful metric for investors as it is a common metric used by investors, analysts and debt holders to measure our ability to service our debt obligations, fund capital expenditures and meet working capital requirements.

          Adjusted EBITDA is a measurement used by management and the Board to evaluate our core operating results as it excludes certain items whose fluctuations from period-to-period do not necessarily correspond to changes in the core operations of the business. Adjusted EBITDA is also a useful measurement for management and investors to measure our ability to service our debt obligations.

          Adjusted Net Income is also used by management and the Board to assess its business, as well as by investors and analysts, to measure performance. Management uses this measure to evaluate our core operating results as it excludes certain items whose fluctuations from period-to-period do not necessarily correspond to changes in the core operations of the business, but includes certain items such as depreciation, interest expense and an adjusted tax rate, which are otherwise excluded from Adjusted EBITDA. As we continue to reduce our outstanding debt as contemplated in this offering, we expect that items included in Adjusted Net Income and excluded from Adjusted EBITDA, such as interest expense, will have less impact on our financial performance. Accordingly, we expect that Adjusted Net Income will increasingly become more important for our Board in establishing incentive compensation based on our performance and for our investors as the measure of our operating performance on a period-to-period basis.

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          Adjusted Net Income, giving effect to the offering gives effect to the offering and the related transactions contemplated therein. See footnote 5 to "Selected and Pro Forma Consolidated Financial Data." Management believes this measure is informative to investors by providing investors with the ability to compare Adjusted Net Income in future periods to historical amounts after giving effect to the offering.

          These non-GAAP measures are performance measures only and are not measures of our cash flows or liquidity. EBITDA, Adjusted EBITDA, Adjusted Net Income (including diluted Adjusted Net Income per share) and Adjusted Net Income, giving effect to the offering (including diluted Adjusted Net Income per share, giving effect to the offering) are non-GAAP financial measures that are not in accordance with, or an alternative for, measures of financial performance prepared in accordance with GAAP and may be different from similarly titled non-GAAP measures used by other companies. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. Some of the limitations are:

    EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;

    although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income, giving effect to the offering do not reflect the cash requirements for such replacements; and

    EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income, giving effect to the offering do not reflect our actual tax expense or, in the case of EBITDA and Adjusted EBITDA, the cash requirements to pay our taxes.

          See the consolidated financial statements included elsewhere in this prospectus for our GAAP results. Additionally, for reconciliations of EBITDA, Adjusted EBITDA, and Adjusted Net Income (including diluted Adjusted Net Income per share) to our closest reported GAAP measures see "Selected and Pro Forma Consolidated Financial Data."

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SELECTED AND PRO FORMA CONSOLIDATED FINANCIAL DATA

          The following tables set forth our selected and pro forma consolidated financial data for the periods ending on and as of the dates indicated. We derived the consolidated statements of operations data for the years ended December 31, 2011, December 31, 2012 and December 31, 2013 and the consolidated balance sheet data as of December 31, 2011, December 31, 2012 and December 31, 2013 from our audited consolidated financial statements and the related notes thereto included elsewhere in this prospectus. The consolidated statements of operations data for the six months ended June 30, 2013 and June 30, 2014 and the consolidated balance sheet data as of June 30, 2014 have been derived from our unaudited consolidated financial statements included elsewhere in this prospectus. We have prepared the unaudited consolidated financial information set forth below on the same basis as our audited consolidated financial statements and have included all adjustments, consisting of only normal recurring adjustments, that we consider necessary for a fair presentation of our financial position and operating results for such periods. The results for any interim period are not necessarily indicative of the results that may be expected for a full year.

          Our historical results are not necessarily indicative of future results of operations. You should read the information set forth below together with "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Capitalization" and our consolidated financial statements and the related notes thereto included elsewhere in this prospectus.

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  Year Ended December 31,   Six Months
Ended
June 30,
 
 
  2011(1)   2012   2013   2013   2014  
 
  (in thousands, except per share amounts)
 

Statement of Operations Data:

                               

Net service revenue

  $ 437,005   $ 579,145   $ 652,418   $ 308,945   $ 388,240  

Reimbursable out-of-pocket expenses

    218,981     289,455     342,672     173,432     164,280  
                       

Total revenue

    655,986     868,600     995,090     482,377     552,520  

Direct costs

    279,840     389,056     432,261     211,265     251,545  

Reimbursable out-of-pocket expenses

    218,981     289,455     342,672     173,432     164,280  

Selling, general and administrative

    95,063     109,428     117,890     56,156     66,147  

Restructuring and other costs(2)

    27,839     35,380     11,828     7,145     3,175  

Transaction expenses(3)

    10,322         508     354     2,042  

Goodwill and intangible assets impairment(4)

        4,000             17,245  

Depreciation

    15,818     19,915     19,175     9,204     11,894  

Amortization

    48,318     58,896     39,298     19,665     13,740  
                       

Income (loss) from operations

    (40,195 )   (37,530 )   31,458     5,156     22,452  

Interest expense, net

    (65,482 )   (62,007 )   (60,489 )   (29,589 )   (28,724 )

Other income (expense), net

    11,519     4,679     (1,649 )   (1,065 )   1,041  
                       

Income (loss) before provision for income taxes

    (94,158 )   (94,858 )   (30,680 )   (25,498 )   (5,231 )

Income tax benefit (expense)

    34,611     35,744     (10,849 )   (1,882 )   18,986  
                       

Net (loss) income

    (59,547 )   (59,114 )   (41,529 )   (27,380 )   13,755  

Class C common stock dividend

    (4,500 )   (500 )   (500 )   (250 )   (250 )
                       

Net (loss) income attributable to Class A common stockholders:

  $ (64,047 ) $ (59,614 ) $ (42,029 ) $ (27,630 ) $ 13,505  
                       
                       

Net (loss) income per share attributable to Class A common stockholders:

                               

Basic

  $ (0.17 ) $ (0.14 ) $ (0.10 ) $ (0.06 ) $ 0.03  

Diluted

    (0.17 )   (0.14 )   (0.10 )   (0.06 )   0.03  

Weighted average Class A common shares outstanding:

                               

Basic

    370,742     441,115     439,479     439,597     438,534  

Diluted

    370,742     441,115     439,479     439,597     439,959  

Unaudited Pro Forma Data:

   
 
   
 
   
 
   
 
   
 
 

Pro forma net (loss) income attributable to common stockholders(5)

              $           $    

Pro forma basic net (loss) income per common share(5)

                               

Pro forma diluted net (loss) income per common share(5)

                               

Pro forma weighted average common shares outstanding:

                               

Basic

                               

Diluted

                               

Statement of Cash Flow Data:

   
 
   
 
   
 
   
 
   
 
 

Net cash (used in) provided by:

                               

Operating activities

  $ (18,533 ) $ 42,999   $ 37,270   $ (3,476 ) $ 80,396  

Investing activities

    (369,670 )   (12,974 )   (17,714 )   (7,241 )   (15,241 )

Financing activities

    422,053     (18,932 )   (6,841 )   (2,077 )   (7,323 )

Other Financial Data:

   
 
   
 
   
 
   
 
   
 
 

EBITDA(6)

  $ 35,460   $ 45,960   $ 88,282   $ 32,960   $ 49,127  

Adjusted EBITDA(6)

    65,450     84,366     105,521     42,774     72,613  

Adjusted Net (Loss) Income(6)

    (3,711 )   2,735     15,375     1,837     20,813  

Diluted Adjusted Net (Loss) Income per common share(6)

    (0.01 )   0.01     0.03     0.00     0.05  

Adjusted Net Income, giving effect to the offering(6)

                           

Diluted Adjusted Net Income per common share, giving effect to the offering(6)

                           

Capital expenditures

    4,763     9,591     17,714     7,241     12,939  

Cash dividend paid to Class C stockholders

    4,500     500     500     250     250  

Operating Data:

   
 
   
 
   
 
   
 
   
 
 

Backlog(7)

  $ 1,221,641   $ 1,320,548   $ 1,490,787   $ 1,240,412   $ 1,492,660  

Net new business awards(8)

    449,254     676,250     814,177     231,139     384,259  

Net Book-to-Bill ratio(8)

    1.0x     1.2x     1.2x     0.7x     1.0x  

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  As of December 31,    
 
 
  As of
June 30,
2014
 
 
  2011(1)   2012   2013  
 
  (in thousands)
 

Balance Sheet Data:

                         

Cash and cash equivalents

  $ 70,960   $ 81,363   $ 96,972   $ 155,549  

Total assets

    1,373,905     1,257,654     1,233,111     1,320,521  

Total debt and capital leases(9)

    605,593     594,186     594,479     588,998  

Total stockholders' equity

  $ 379,490   $ 316,830   $ 276,207   $ 289,027  

(1)
We acquired Trident on June 1, 2011 and Kendle on July 12, 2011. The financial results of these entities have been included as of and since the date of acquisition. For further details, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—The Effect of Acquisitions on the Comparability of Our Historical Financial Statements" and Note 3 to our consolidated financial statements included elsewhere in this prospectus.

(2)
Restructuring and other costs consist of (i) severance costs associated with the reduction of our workforce in line with our future business operations and duplicative staff as a result of our acquisitions of Kendle and Trident and (ii) lease obligation and termination costs in connection with the abandonment and closure of redundant facilities as a result of our restructuring initiatives. Other costs consist primarily of information technology and other consulting and legal fees attributable to our integration of Kendle.

(3)
Transaction expenses of $10.3 million for the year ended December 31, 2011 were related to legal fees, accounting fees and the noncapitalizable portion of bank fees related to our acquisition of Kendle. Transaction expenses of $0.5 million for the year ended December 31, 2013 were related to third-party fees associated with debt refinancing and the legal fees associated with our acquisition of MEK Consulting in March 2014. For the six months ended June 30, 2013, transaction expenses were $0.4 million of legal fees associated with debt refinancing. For the six months ended June 30, 2014, transaction expenses were $2.0 million and consisted of $1.7 million of third-party fees associated with the debt refinancing in February 2014 and $0.3 million of legal fees associated with the MEK Consulting acquisition.

(4)
During the year ended December 31, 2012, we recorded a $4.0 million impairment charge related to the goodwill associated with our Phase I Services reporting unit. During the six months ended June 30, 2014, we recorded a $17.2 million impairment charge related to intangible assets and goodwill associated with our Phase I Services and Global Consulting reporting units.

(5)
Pro forma net income and earnings per share:

Unaudited pro forma net (loss) income gives effect to (i) dividends deemed to be in contemplation of an initial public offering and (ii) adjustments to interest expense and amortization of debt issuance costs related to (a) the repurchase of all of our outstanding Notes and (b) the borrowings under the $             of new term loans, the proceeds of which, along with $             proceeds from the initial public offering and $             of existing cash, will be used to repurchase such outstanding Notes, as described in "Use of Proceeds." Unaudited pro forma earnings per share gives effect to the sale of the number of shares of Class A common stock required, using an assumed initial public offering price of $         per share, which is the midpoint of the price range set forth on the cover of this prospectus, to (i) fund the deemed payment of dividends assumed to be in contemplation of the initial public offering, (ii) fund the proceeds used to repay the Notes, and (iii) give effect to our corporate reorganization as described in "Corporate Reorganization" immediately prior to the consummation of this offering. As the number of incremental shares that would have been issued related to the payment of the items listed above exceed the total number of shares to be issued in this offering, we have limited the number of pro forma shares for purposes of calculating the pro forma per share data to the total number of shares to be issued in the offering.

We declared and paid dividends to our Class C stockholders of $0.5 million during 2013 and $0.3 million during the six months ended June 30, 2014. Dividends declared in the year preceding an initial public offering are deemed to be in contemplation of the offering with the intention of repayment out of the offering proceeds to the extent that the dividends exceeded earnings during such period.

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    The following presents the computation of unaudited pro forma net income and unaudited pro forma earnings per share:

 
  Year Ended
December 31,
2013
  Six Months
Ended
June 30,
2014
 
 
  (in thousands,
except per share amounts)

 

 

 

 

 

 

 

 

 

Net (loss) income attributable to Class A stockholders

  $ 42,029   $ 13,505  

Pro forma adjustment for interest expense, net of tax(a)

             
           

Pro forma net income

  $   $  
           
           

Pro forma earnings per share

             

Basic

  $   $  

Diluted

         

Common shares used in computing income per Class A common share

             

Basic

    439,497     438,534  

Diluted

    439,497     439,959  

Total pro forma common share adjustment

             

Pro forma weighted average common shares outstanding

             

Basic

         

Diluted

         

(a)
These adjustments reflect the elimination of the historical interest expense and amortization of debt issuance costs related to the 2011 senior notes and 2011 credit facility, as well as the incurrence of interest expense related to the new term loans, after reflecting the pro forma effect of the refinancing as follows:

 
  Year ended December 31, 2013  
 
  Interest
Expense
  Amortization
of Debt Issue
Costs
  Tax Effect   Total  

2011 senior notes

                    $  

2011 credit facility

                       
                   

New term loans

  $   $   $   $  
                   
                   


 
  Six months ended June 30, 2014  
 
  Interest
Expense
  Amortization
of Debt Issue
Costs
  Tax Effect   Total  

2011 senior notes

                    $  

2011 credit facility

                       
                   

New term loans

  $   $   $   $  
                   
                   

    The pro forma adjustments are not tax affected as the impact amounts would have been offset by the release of deferred tax asset valuation allowances.

(b)
Adjustments for common shares as follows:

Indebtedness to be repaid with proceeds from this offering

  $          

Offering price per common share

             
             

Common shares assumed issued to repay Notes

           
             

Total common shares assume to be issued

           
             
             

    The shares of the offering were fully utilized in the repayment of indebtedness, therefore, no adjustment has been made to the pro forma shares outstanding for dividends paid in excess of earnings.

(6)
We report our financial results in accordance with GAAP. To supplement this information, we also use the following non-GAAP financial measures in this prospectus: EBITDA, Adjusted EBITDA, Adjusted Net Income (including diluted Adjusted Net Income per share) and Adjusted Net Income, giving effect to the offering (including diluted Adjusted Net Income per share, giving effect to the offering). For a discussion of the non-GAAP financial measures in this prospectus, see "Non-GAAP Financial Measures."

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    Investors and potential investors are encouraged to review the following reconciliations of EBITDA, Adjusted EBITDA, Adjusted Net Income (including diluted Adjusted Net Income per share) and Adjusted Net Income, giving effect to the offering (including diluted Adjusted Net Income per share, giving effect to the offering) to our closest reported GAAP measures:

 
   
   
   
  Six Months Ended  
 
  Year Ended December 31,  
 
  June 30,
2013
  June 30,
2014
 
 
  2011   2012   2013  
 
  (in thousands, except per share amounts)
 

EBITDA and Adjusted EBITDA:

                               

Net (loss) income as reported

  $ (59,547 ) $ (59,114 ) $ (41,529 ) $ (27,380 ) $ 13,755  

Interest expense, net

    65,482     62,007     60,489     29,589     28,724  

Income tax (benefit) expense

    (34,611 )   (35,744 )   10,849     1,882     (18,986 )

Depreciation

    15,700     19,915     19,175     9,204     11,894  

Amortization

    48,436     58,896     39,298     19,665     13,740  
                       

EBITDA

    35,460     45,960     88,282     32,960     49,127  
                       

Other expense (income)

    (9,864 )   (1,944 )   1,453     1,065     (1,041 )

Restructuring and other costs

    27,839     35,380     11,828     7,145     3,175  

Stock-based compensation expense

    1,176     1,248     2,419     719     1,424  

Contingent consideration treated as compensation expense(a)

   
1,540
   
1,867
   
253
   
252
   
358
 

Debt refinancing expenses(b)

    2,167         244     275     1,763  

Transaction expenses(c)

    8,155         264     79     279  

Monitoring and advisory fees(d)

    632     590     582     279     283  

Loss (gain) on unconsolidated affiliates

    (1,655 )   (2,735 )   196          

Goodwill and intangible assets impairment

        4,000             17,245  
                       

Adjusted EBITDA

  $ 65,450   $ 84,366   $ 105,521   $ 42,774   $ 72,613  
                       
                       

Adjusted Net Income and Adjusted Net Income, giving effect to the offering:

                               

Net (loss) income as reported

  $ (59,547 ) $ (59,114 ) $ (41,529 ) $ (27,380 ) $ 13,755  

Amortization

    48,436     58,896     39,298     19,665     13,740  

Restructuring and other costs

    27,839     35,380     11,828     7,145     3,175  

Stock-based compensation expense

    1,176     1,248     2,419     719     1,424  

Contingent consideration treated as compensation expense(a)

   
1,540
   
1,867
   
253
   
252
   
358
 

Debt refinancing expenses(b)

    2,167         244     275     1,763  

Transaction expenses(c)

    8,155         264     79     279  

Monitoring and advisory fees(d)

    632     590     582     279     283  

Loss (gain) on unconsolidated affiliates

    (1,655 )   (2,735 )   196          

Goodwill and intangible assets impairment

        4,000             17,245  

Adjust income tax to normalized rate

    (32,454 )(f)   (37,397 )(f)   1,820 (e)   803 (e)   (31,209 )(e)
                       

Adjusted Net (Loss) Income

  $ (3,711 ) $ 2,735   $ 15,375   $ 1,837   $ 20,813  
                       
                       

Interest expense on net paydown of debt(g)

                           

Adjust income tax to normalized rate(e)

                           
                             

Adjusted Net Income, giving effect to the offering

              $         $  
                             
                             

Diluted Adjusted Net Income (Loss) Per Share:

                               

Diluted Adjusted Net (Loss) Income per share

  $ (0.01 ) $ 0.01   $ 0.03   $ 0.00   $ 0.05  

Diluted weighted average common shares outstanding

    370,742     441,395     439,681     439,763     439,959  

Diluted Adjusted Net Income Per Share, giving effect to the offering:

   
 
   
 
   
 
   
 
   
 
 

Diluted Adjusted Net Income per share, giving effect to the offering

              $         $  

Diluted weighted average common shares outstanding(f)

                           

(a)
Consists of contingent consideration expense incurred as a result of acquisitions and accounted for as compensation expense under GAAP. See Note 3 to our consolidated financial statements included elsewhere in this prospectus.

(b)
Represents fees associated with the debt placement and refinancing.

(c)
Represents costs incurred in connection with business combinations and potential acquisitions, including fees paid to Avista in 2011 in connection with the Kendle acquisition.

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(d)
Monitoring and advisory fees are paid to affiliates of Avista, which will terminate upon completion of this offering, as well as reimbursements of expenses paid to Avista and Teachers pursuant to the Expense Reimbursement Agreement.

(e)
The effective tax rate has been adjusted to reflect the removal of the tax impact of our valuation allowances recorded against our deferred tax assets and changes in the assertion to permanently reinvest the undistributed earnings of foreign subsidiaries. Historically, we recorded a valuation allowance against some of our deferred tax assets, but we believe that these valuation allowances cause significant fluctuations in our financial results which are not indicative of our underlying financial performance. Specifically, the majority of our revenue in 2013 was generated in jurisdictions in which we recognized no tax expense or benefit due to changes in this valuation allowance. Further, we have historically recorded a valuation allowance against certain foreign tax losses, however, in the second quarter of 2014 the valuation allowance in one of our jurisdictions was reversed creating a significant tax benefit of $24.4 million, which we also do not believe is indicative of our ongoing operations. The adjustment is based on utilizing a 37% overall effective tax rate.

The effective tax rate has also been adjusted to reflect the tax adjustments for the estimated tax impact of the non-operating non-GAAP adjustments used to arrive at Adjusted Net Income (Loss), using the estimated effective tax rate of 37%.

(f)
Adjustment for the tax effect of the non-GAAP adjustments made to arrive at Adjusted Net (Loss) Income using the effective tax rate for the period.

(g)
See unaudited pro forma discussion above under (5).
(7)
Backlog consists of anticipated net service revenue from contract and pre-contract commitments that are supported by written communications. The dollar amount of our backlog consists of anticipated future net service revenue from business awards that either have not started but are anticipated to begin in the next 12 months, or are in process and have not been completed. The majority of our contracts can be terminated by our customers with 30 days' notice. Backlog has been adjusted to reflect any cancellations or adjustments to the related contracts and changes in the foreign currency exchange rates of awards not denominated in U.S. dollars. Included within backlog at June 30, 2014 is approximately $1.1 billion that we do not expect to generate revenue in 2014. Backlog is not necessarily indicative of future financial performance because it will likely be impacted by a number of factors, including the size and duration of projects which can be performed over several years, project change orders resulting in increases or decreases in project scope and cancellations.

(8)
Net new business awards represent the value of future net service revenue awarded during the period supported by contracts or written pre-contract communications from our customers for projects that have received appropriate internal funding approval, are not contingent upon completion of another trial or event, and are expected to commence within the next 12 months, minus the value of cancellations in the same period. We believe net book-to-bill ratio represents "net new business awards" divided by net service revenue. Net book-to-bill ratio is commonly used in our industry and represents a useful indicator of our potential future revenue growth rate as it measures the rate at which we are generating net new business awards compared to our current revenues. Net book-to-bill is best viewed on a trailing twelve month basis due to the variability within any particular quarter that can be caused by a very large award or cancellation. The trailing twelve month net book-to-bill ratio for June 30, 2013 and June 30, 2014 was 0.8x and 1.3x, respectively. Further, we cannot assure you that the net book-to-bill rate is predictive of future financial performance because it will likely be impacted by a number of factors, including the size and duration of projects which can be performed over several years, project change orders resulting in increases or decreases in project scope and cancellations.

(9)
Includes $8.0 million, $6.7 million, $4.6 million, and $3.5 million of unamortized discounts as of December 31, 2011, 2012, and 2013 and June 30, 2014, respectively.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

          The following discussion and analysis of our financial condition and results of operations should be read together with "Selected and Pro Forma Consolidated Financial Data" and the consolidated financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements related to future events and our future financial performance that are based on current expectations and subject to risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under "Risk Factors," "Cautionary Note Regarding Forward-Looking Statements" and elsewhere in this prospectus.

Overview of Our Business and Services

          We are a leading global CRO, exclusively focused on Phase I to Phase IV clinical development services for the biopharmaceutical and medical device industries. We provide our customers highly differentiated therapeutic alignment and expertise, with a particular strength in CNS, oncology and other complex diseases. We consistently and predictably deliver clinical development services in a complex environment and offer a proprietary, operational approach to clinical trials through our Trusted Process® methodology. Our service offerings focus on optimizing the development of and, therefore, the commercial potential for, our customers' new biopharmaceutical compounds, enhancing returns on their R&D investments, and reducing their overhead by offering an attractive variable cost alternative to fixed cost, in-house resources.

          Our extensive range of services supports the entire clinical development process from Phase I to Phase IV and allows us to offer our customers an integrated suite of investigative site support and clinical development services. We offer these services across a wide variety of therapeutic areas with deep clinical expertise with a primary focus on Phase II to Phase IV clinical trials. We provide total biopharmaceutical program development while also providing discrete services for any part of a trial. The combination of service area experts and the depth of clinical capability allows for enhanced protocol design and actionable trial data.

          We have three reportable segments: Clinical Development Services, Phase I Services and Global Consulting. Clinical Development Services offers a variety of select and stand-alone clinical development services as well as full-service global studies, along with ancillary services such as clinical monitoring, investigator recruitment, patient recruitment, data management and study reports to assist customers with their drug development process. Phase I Services focuses on clinical development services for Phase I trials that include scientific exploratory medicine, first-in-human studies through proof-of-concept stages and support for Phase I studies in established compounds. Global Consulting provides consulting services regarding clinical trial regulatory affairs, regulatory consulting services, quality assurance audits and pharmacovigilance consulting, non-clinical consulting and medical writing consulting.

          Our discussion and analysis of our financial condition and results of operations herein is presented on a consolidated basis. Because our Clinical Development Services segment accounts for substantially all of our business operations and approximately 95% of our net service revenue for the year ended December 31, 2013, we believe that a discussion of our reportable segments' operations would not be meaningful disclosure for investors. See further discussion in Note 13 to our consolidated financial statements included elsewhere in this prospectus.

          We earn net service revenue primarily for services performed under contracts for global clinical drug trials, based upon a combination of milestones and output measures that are specific to the services performed and defined by the contract. Engagements for Phase II to Phase IV clinical trials, which represent the majority of our revenue, are typically long duration contracts ranging from several months to several years. The contracts for these engagements typically cover the detailed

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scope of work, phases, milestones, billing schedules and processes for review of work and clinical results. Contracts are individually priced and negotiated based on the anticipated level of effort required to complete the project, the complexity and performance risks and the level of competition in the market.

          Direct costs associated with these contracts consist principally of compensation expense and benefits associated with our employees and other employee-related costs. While we can manage the majority of these costs relative to the amount of contracted services we have during any given period, direct costs as a percentage of net service revenue can vary from period to period. Such fluctuations are due to a variety of factors, including, among others: (i) the level of staff utilization created by our ability to effectively manage our workforce, (ii) adjustments to the timing of work on specific customer contracts,(iii) the experience mix of personnel assigned to projects, and (iv) the service mix and pricing of our contracts. In addition, as global projects wind down or as delays and cancellations occur, staffing levels in certain countries or functional areas can become misaligned with the current business volume.

Corporate Reorganization

          Prior to the consummation of this offering, we will effect a corporate reorganization, whereby our direct, wholly-owned subsidiary, INC Intermediate, will merge with and into us, and we will be the surviving entity of such merger. As part of the merger, (i) each currently outstanding share of Class A common stock held by stockholders other than an affiliate of OTPP will be converted into             shares of new Class A common stock, (ii) each currently outstanding share of Class A common stock held by an affiliate of OTPP will be converted into             shares of new Class B common stock, (iii) each currently outstanding share of Class B common stock will be converted into one share of Class D common stock, and (iv) each currently outstanding share of Class C common stock will be converted into one share of new Class C common stock. Following the merger and prior to this offering, we will redeem all of the outstanding shares of new Class C common stock and Class D common stock for $             and $             , respectively, using cash on hand, and subsequent to such redemptions of the new Class C common stock and Class D common stock, we will amend and restate our certificate of incorporation to eliminate the new Class C common stock and the Class D common stock from our authorized common stock. In addition, as part of the merger, we will also effect a           for 1 reverse stock split of our Class A common stock. Immediately following the merger, an affiliate of OTPP will convert the relevant number of shares of new Class B common stock into new Class A common stock such that affiliates of OTPP hold no more than 30% of the total issued and outstanding new Class A common stock after giving effect to this offering. We refer to these steps as the "corporate reorganization." The corporate reorganization will not affect our operations, which we will continue to conduct through our operating subsidiaries. See "Corporate Reorganization."

Refinancing

          In connection with this offering, we intend to refinance our senior secured credit facilities and incur additional term loans thereunder in an aggregate principal amount of $             . We intend to use the proceeds of these borrowings, along with the proceeds of this offering and, assuming an initial public offering price of $             per share, which is the midpoint of the price range set forth on the cover page of this prospectus, $           of cash on hand to redeem all of our outstanding Notes and pay any redemption premiums, make-whole interest and related fees and expenses. See "Description of Material Indebtedness."

The Effect of Acquisitions on the Comparability of Our Historical Financial Statements

          On June 1, 2011, we completed the acquisition of Trident, a full service CRO providing Phase I to Phase IV services in the Asia-Pacific region, or the Trident Acquisition. The results of Trident's

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operations have been included in our consolidated financial statements since that date. The purchase agreement required us to pay up to $7.6 million of additional consideration to Trident's former shareholders, if a key employee, who was also a shareholder, remained an employee in good standing with the Company, as defined in the agreement, upon specified anniversary dates. Of the $7.6 million of additional consideration, $3.7 million was due to this same key employee and was accrued and expensed as compensation ratably over the contingent employment period. As of December 31, 2013, we had fully paid the total additional consideration of $7.6 million.

          On July 12, 2011, we completed the acquisition of Kendle, or the Kendle Acquisition, for $15.25 per share in cash. The fair value of the consideration transferred at the acquisition date was $377.3 million. The results of Kendle's operations have been included in our consolidated financial statements since that date. The Kendle Acquisition expanded our global footprint, broadened our therapeutic expertise, provided additional scale to serve our customers and increased our top-tier position in Phase II to Phase IV clinical trials relative to other global CROs.

          The following discussion and analysis of our financial condition and results of operations includes periods prior to the consummation of the Kendle Acquisition and related financing and other transactions, and the Trident Acquisition. The term "Acquired Businesses" refers to the businesses that we acquired pursuant to the Kendle Acquisition and the Trident Acquisition. The discussion and analysis of historical periods reflects the results of operations of the Acquired Businesses from their respective acquisition dates. Our financial statements subsequent to these acquisition dates differ in important respects from our historical financial statements, which affects the comparability of our financial results. For additional information on the Acquired Businesses and other acquisitions, see Note 3 to our consolidated financial statements included elsewhere in this prospectus.

New Business Awards and Backlog

          We add new business awards to backlog when we enter into a contract or when we receive a written commitment from the customer selecting us as its service provider, provided that (i) the customer has received appropriate internal funding approval, (ii) the project or projects are not contingent upon completion of another trial or event, (iii) the project or projects are expected to commence within the next 12 months and (iv) in the case of a written commitment from a customer, the customer intends to enter into a comprehensive contract as soon as practicable. Contracts generally have terms ranging from several months to several years. We recognize revenue on these awards as services are performed, provided we have entered into a contractual commitment with the customer. Our new business awards, net of cancellations of prior awards, for the six months ended June 30, 2013 and 2014 were $231.1 million and $384.3 million, respectively, representing a 66.2% year-over-year increase. Our new business awards, net of cancellations of prior awards, for the years ended December 31, 2011, 2012, and 2013 were $449.3 million, $676.3 million and $814.2 million, respectively, representing a 50.5% increase from 2011 to 2012 and a 20.4% increase from 2012 to 2013. Net new business awards were negatively impacted for the six months ended June 30, 2014 as a result of a cancellation of interrelated programs during the second quarter of 2014 of approximately $125 million due to scientific concerns our customer had with the viability of the compound under development. This cancellation reduced net awards by $87 million during the six months ended June 30, 2014. New business awards have varied and will continue to vary significantly from quarter to quarter.

          The dollar amount of our backlog consists of anticipated future net service revenue from business awards that either have not started but are anticipated to begin in the future, or that are in process and have not been completed. Our backlog also reflects any cancellation or adjustment activity related to these contracts. The average duration of our contracts will fluctuate from period to period in the future based on the contracts comprising our backlog at any given time. The majority

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of our contracts can be terminated by our customers with 30 days' notice. The dollar amount of our backlog is adjusted each quarter for foreign currency fluctuations. Our backlog as of June 30, 2013 was $1.2 billion, compared to $1.5 billion as of June 30, 2014, representing a year-over-year increase of 20.3%. Our backlog as of December 31, 2011, 2012 and 2013 was $1.2 billion, $1.3 billion and $1.5 billion, respectively, representing a 8.1% increase from 2011 to 2012 and 12.9% increase from 2012 to 2013. Included within backlog at June 30, 2014 is approximately $1.1 billion that we do not expect to generate revenue in 2014. Backlog is not necessarily indicative of future financial performance because it will likely be impacted by a number of factors, including the size and duration of projects which can be performed over several years, project change orders resulting in increases or decreases in project scope and cancellations.

          We believe that backlog and net new business awards might not be consistent indicators of future revenue because they have been, and likely will be, affected by a number of factors, including the variable size and duration of projects, many of which are performed over several years, and cancellations and changes to the scope of work during the course of projects. Additionally, projects may be canceled or delayed by the customer or delayed by regulatory authorities. Projects that have been delayed remain in backlog, but the anticipated timing of the recognition of revenue is uncertain. We generally do not have a contractual right to the full amount of the revenue reflected in our backlog or net new business awards in the event of cancellation. If a customer cancels an award, we may be reimbursed for the costs we have incurred.

          Fluctuations in our reported backlog and net new business award levels also result from the fact that we may receive a small number of relatively large orders in any given reporting period. Because of these large orders, our backlog and net new business awards in that reporting period might reach levels that are not sustained in subsequent reporting periods. As we increasingly compete for and enter into large contracts that are more global in nature, we expect the rate at which our backlog and net new business awards convert into revenue to decrease, or lengthen. See "Risk Factors—Risks Related to Our Business—Our backlog might not be indicative of our future revenues, and we might not realize all of the anticipated future revenue reflected in our backlog" for more information.

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Results of Operations

Six Months Ended June 30, 2013 Compared to Six Months Ended June 30, 2014

          The following table sets forth amounts from our unaudited consolidated financial statements along with the percentage changes for the six months ended June 30, 2013 and June 30, 2014 (dollars in thousands):

 
  Six Months Ended    
   
 
 
  June 30,
2013
  June 30,
2014
  Change  

Net service revenue

  $ 308,945   $ 388,240   $ 79,295     25.7 %

Reimbursable out-of-pocket expenses

    173,432     164,280     (9,152 )   (5.3 )%
                       

Total revenue

    482,377     552,520     70,143     14.5 %

Direct costs

    211,265     251,545     40,280     19.1 %

Reimbursable out-of-pocket expenses

    173,432     164,280     (9,152 )   (5.3 )%

Selling, general and administrative

    56,156     66,147     9,991     17.8 %

Restructuring and other costs

    7,145     3,175     (3,970 )   (55.6 )%

Transaction expenses

    354     2,042     1,688     476.8 %

Impairment of goodwill and intangible assets

        17,245     17,245      

Depreciation

    9,204     11,894     2,690     29.2 %

Amortization

    19,665     13,740     (5,925 )   (30.1 )%
                       

Total operating expenses

    477,221     530,068     52,847     11.1 %

Income from operations

    5,156     22,452     17,296     335.5 %

Total other expense, net

    (30,654 )   (27,683 )   (2,971 )   (9.7 )%
                       

Loss before provision for income taxes

    (25,498 )   (5,231 )   (20,267 )   (79.5 )%

Income tax (expense) benefit

    (1,882 )   18,986     20,868     1,108.8 %
                       

Net (loss) income

  $ (27,380 ) $ 13,755   $ 41,135     150.2 %
                       
                       

Net Service Revenue and Reimbursable Out-of-Pocket Expenses

          Our total revenue is comprised of net service revenue and revenue from reimbursable out-of-pocket expenses. We earn net service revenue primarily for services performed under contracts for global clinical drug trials, based upon a combination of milestones and output measures that are specific to the services performed and defined by the contract. Reimbursable out-of-pocket expenses consist primarily of principal investigator fees, travel and other costs reimbursed by our customers.

          Engagements for Phase II to Phase IV clinical trials, which represent the majority of our net service revenue, are typically long duration contracts ranging from several months to several years. The contracts for these engagements typically cover the detailed scope of work, phases, milestones, billing schedules and processes for review of work and clinical results. Contracts are individually priced and negotiated based on the anticipated level of effort required to complete the project, the complexity and performance risks, and the level of competition in the market. Contracts include change order provisions for managing the scope of work to be performed and billed under the contract. Project invoicing includes provisions for payment of our fees and reimbursement of our out-of-pocket expenses, which may include travel, other trial costs, and payments to third parties providing additional services. Our contracts may also provide for advance payment by our customers, depending upon the contract. Contracted work may be terminated by our customers, typically with a 30-day notice period. These contracts may also include provisions governing the services, and timing of those services, required to wind-down a trial in the event of cancellation.

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          For the six months ended June 30, 2013 and June 30, 2014, total revenue was comprised of the following (dollars in thousands):

 
  Six Months Ended    
   
 
 
  June 30,
2013
  June 30,
2014
  Change  

Net service revenue

  $ 308,945   $ 388,240   $ 79,295     25.7 %

Reimbursable out-of-pocket expenses

    173,432     164,280     (9,152 )   (5.3 )%
                       

Total revenue

  $ 482,377   $ 552,520   $ 70,143     14.5 %
                       
                       

          Net service revenue increased $79.3 million, or 25.7%, to $388.2 million for the six months ended June 30, 2014, from $308.9 million for the six months ended June 30, 2013. The increase during the six months ended June 30, 2014 is primarily driven by strong awards during the second half of 2013 and the first quarter of 2014 and higher contract change order activity relative to historical levels. The growth in our revenue in 2014 was particularly strong in the CNS therapeutic area and with a strategic FSP (Functional Service Provider) customer. In addition, our second quarter 2014 change order activity was significantly higher than our historical average, resulting in revenue growth of approximately $6 million to $9 million in the first half of 2014.

          Reimbursable out-of-pocket expenses decreased 5.3%, or $9.2 million, to $164.3 million for the six months ended June 30, 2014, from $173.4 million for the six months ended June 30, 2013. Reimbursable out-of-pocket expenses fluctuate significantly from period to period based on the timing of program initiation or closeout and the mix of program complexity and do not necessarily change in correlation to net service revenues. The reimbursements are offset by an equal amount of indirect costs.

          Net service revenue from our top five customers accounted for approximately 38% and 32% of total net service revenue for the six months ended June 30, 2014 and 2013, respectively.

          Various subsidiaries of Otsuka Holdings Co., Ltd. accounted for 14% and 15% of total net service revenue for the six months ended June 30, 2014 and 2013, respectively. Various subsidiaries of Astellas Pharma, Inc. accounted for 12% of net service revenue for the six months ended June 30, 2014.

Direct Costs and Reimbursable Out-of-pocket Expenses

          Our direct costs consist primarily of direct labor and employee benefits, facility costs associated with these personnel and other costs directly related to contract performance. Direct costs as a percentage of net service revenue can vary from period to period due to fluctuations in staff utilization created by our management of our workforce and adjustments to the timing of work on specific customer contracts, the experience mix of personnel assigned to projects, and the service mix and pricing of our contracts. In addition, as global projects wind down or as delays and cancellations occur, staffing levels in certain countries or functional areas can become misaligned with the current business volume as the mix of countries and services vary from study to study and by therapeutic area. Reimbursable out-of-pocket expenses consist primarily of principal investigator fees, travel and other costs reimbursed by our customers.

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          For the six months ended June 30, 2013 and June 30, 2014, direct costs and reimbursable out-of-pocket expenses were as follows (dollars in thousands):

 
  Six Months Ended    
   
 
 
  June 30,
2013
  June 30,
2014
  Change  

Direct costs

  $ 211,265   $ 251,545   $ 40,280     19.1 %

Reimbursable out-of-pocket expenses

    173,432     164,280     (9,152 )   (5.3 )%
                       

Total direct costs and reimbursable out-of-pocket expenses

  $ 384,697   $ 415,825   $ 31,128     8.1 %
                       
                       

          The following is a summary of the year-over-year fluctuation in direct costs during the six months ended June 30, 2013 as compared to the six months ended June 30, 2014 (in thousands):

 
  Six Months Ended
June 30,
2013 to 2014
 

Increase (decrease) in:

       

Salaries, benefits, and incentive compensation

  $ 32,709  

Other

    7,571  
       

Total

  $ 40,280  
       
       

          Direct costs increased by $40.3 million, or 19.1%, to $251.5 million for the six months ended June 30, 2014, from $211.3 million for the six months ended June 30, 2013. This increase in salaries, benefits and incentive compensation is primarily due to higher compensation expense and contract labor costs associated with additional headcount in line with our increased revenues, and an increase in incentive compensation as a result of our improved financial performance. Other costs increased primarily due to charges for VAT that cannot be recovered from customers due to changes in tax regulations related to certain foreign operations of $4.5 million.

          Reimbursable out-of-pocket expenses decreased by 5.3%, or $9.2 million, to $164.3 million for the six months ended June 30, 2014, from $173.4 million for the six months ended June 30, 2013. Reimbursable out-of-pocket expenses fluctuate significantly from period to period based on the timing of program initiation or closeout and the mix of program complexity.

Selling, General and Administrative

          Our selling, general, and administrative expenses consist primarily of compensation and benefits, facilities costs associated with these personnel, advertising, professional fees (e.g., legal and accounting expenses), travel and other operating expenses. For the six months ended June 30, 2013 and June 30, 2014, selling, general and administrative expenses were as follows (dollars in thousands):

 
  Six Months Ended    
   
 
 
  June 30,
2013
  June 30,
2014
  Change  

Selling, general and administrative

  $ 56,156   $ 66,147   $ 9,991     17.8 %

Percent of net service revenue

    18.2 %   17.0 %            

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          The following is a summary of the year-over-year fluctuation in our selling, general and administrative expenses during the six months ended June 30, 2013 as compared to the six months ended June 30, 2014 (in thousands):

 
  Six Months Ended
June 30,
2013 to 2014
 

Increase (decrease) in:

       

Salaries, benefits, and incentive compensation

  $ 6,622  

Professional services

    1,403  

Allowance for doubtful accounts

    980  

Travel

    640  

Other

    346  
       

Total

  $ 9,991  
       
       

          Selling, general and administrative expenses increased by $10.0 million, or 17.8%, to $66.1 million for the six months ended June 30, 2014 from $56.2 million for the six months ended June 30, 2013. The increases for the six months ended June 30, 2014 were driven by (i) an increase in salaries, benefits, and incentive compensation from increased headcount and incentive compensation resulting from our growth in new business awards and operational performance, (ii) an increase in professional fees as we continue to support our global footprint, (iii) an increase in allowance for doubtful accounts, and (iv) an increase in travel costs as a result of increased headcount.

          As a result of our cost savings initiatives and our ability to leverage the selling, general and administrative functions as we grow revenue, these expenses as a percentage of net service revenue declined to 17.0% for the six months ended June 30, 2014 from 18.2% for the six months ended June 30, 2013.

Restructuring and Other Costs

          Restructuring and other costs were $3.2 million for the six months ended June 30, 2014, primarily consisting of severance costs and facilities closure expenses. In the second quarter of 2014, we initiated restructuring activities related to the closure of our Glasgow facility and partial closure of our Cincinnati facility. We incurred $2.4 million of severance costs and facility closure expenses in the six months ended June 30, 2014 with respect to this activity, and we expect to incur additional costs of $3.0 million to $4.0 million with respect to these activities in 2014.

          Restructuring and other costs were $7.1 million for the six months ended June 30, 2013, primarily consisting of severance costs and IT and other professional fees. During 2013, we adopted a plan to better align headcount and costs with the current geographic sources and mix of revenue resulting in a reduction of approximately 325 employee and contract positions.

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Transaction expenses

          Transaction expenses were $2.0 million for the six months ended June 30, 2014, and consisted of $1.7 million of third party fees associated with the debt refinancing and $0.3 million of legal fees associated with the MEK Consulting acquisition, a full service CRO with operations in the Middle East that we acquired for $6.0 million in March 2014. For the six months ended June 30, 2013, transaction expenses were $0.4 million of legal fees associated with debt refinancing and expenses for acquisition-related activities.

Impairment of Goodwill and Intangible Assets

          During the second quarter of 2014, we determined that our Phase I Services and Global Consulting reporting units were not performing according to management's expectations, requiring an evaluation of the impairment of the goodwill and intangible assets. As a result of this evaluation, we recorded a $9.2 million impairment of goodwill and an $8.0 million impairment of intangible assets associated with our Phase I Services and Global Consulting reporting units.

Depreciation and Amortization

          Depreciation expense increased by $2.7 million, or 29.2%, for the six months ended June 30, 2014 compared to the six months ended June 30, 2013, primarily due to (i) our continued investment in our IT infrastructure and (ii) the reduction in the estimated useful lives on several assets during the first quarter of 2014 due to the consolidation of data centers and information systems.

          Amortization expense decreased by $5.9 million, or 30.1%, for the six months ended June 30, 2014, compared to the six months ended June 30, 2013. The decreases in amortization expense are primarily due to certain intangible assets becoming fully amortized.

Other Expense, Net

          For the six months ended June 30, 2013 and June 30, 2014, other income and expenses were as follows (dollars in thousands):

 
  Six Months Ended June 30,    
   
 
 
  2013   2014   Change  

Interest income

  $ 105   $ 200   $ 95     90.5 %

Interest expense

    (29,694 )   (28,924 )   (770 )   (2.6 )%

Other, net

    (1,065 )   1,041     (2,106 )   (197.7 )%
                       

Total other expense, net

  $ (30,654 ) $ (27,683 ) $ (2,971 )   (9.7 )%
                       
                       

          Other expense, net, decreased to $27.7 million for the six months ended June 30, 2014 from $30.7 million for the six months ended June 30, 2013. The decrease was primarily driven by a $2.1 million decrease in other expenses primarily due to foreign currency gains in 2014 versus losses in 2013.

Income Tax (Expense) Benefit

          Income tax (expense) benefit was a benefit of $19.0 million for the six months ended June 30, 2014, compared to an expense of $1.9 million for the six months ended June 30, 2013. Income taxes for the six months ended June 30, 2014 was impacted by a $24.4 million discrete income tax benefit recognized as a result of the release of the valuation allowance on certain foreign tax loss

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carryforwards. At June 30, 2014, management concluded that it was more likely than not that a portion of our deferred tax assets will be realized through future taxable income. This conclusion was based, in part, on our achieving sustained profitability in 2014 in these international jurisdictions and projections of positive future earnings. Therefore, we released a significant portion of the valuation allowances related to these deferred tax assets in the second quarter of 2014.

          Other variances from the statutory rate of 35% were due to (i) income or losses generated in jurisdictions where no income tax expense or benefit will be realized, (ii) recognition of certain foreign related unrecognized tax benefits and (iii) the geographical split of pre-tax income.

Net Income (Loss)

          Net income (loss) increased to $13.8 million of net income for the six months ended June 30, 2014 from a net loss of $27.4 million for the reasons discussed above, in particular, the impact of increased services revenue, the overall decrease of operating expenses as a percentage of net service revenue and the income tax benefit as a result of the valuation allowance release of $24.4 million recorded during the first six months of 2014.

Year Ended December 31, 2013 Compared to the Years Ended December 31, 2012 and 2011

          The following table sets forth amounts from our consolidated financial statements along with the percentage change for years ended December 31, 2011, 2012 and 2013 (dollars in thousands):

 
  For the Years Ended
December 31,
  Increase / (Decrease)  
 
  2011   2012   2013   2011 to 2012   2012 to 2013  

Net service revenue

  $ 437,005   $ 579,145   $ 652,418   $ 142,140     32.5%   $ 73,273     12.7%  

Reimbursable out-of-pocket expenses

    218,981     289,455     342,672     70,474     32.2%     53,217     18.4%  
                                       

Total revenue

    655,986     868,600     995,090     212,614     32.4%     126,490     14.6%  
                                       

Costs and expenses:

                                           

Direct costs

    279,840     389,056     432,261     109,216     39.0%     43,205     11.1%  

Reimbursable out-of-pocket expenses

    218,981     289,455     342,672     70,474     32.2%     53,217     18.4%