29th Nov 2016 09:03
LONDON (Alliance News) - Ergomed PLC on Tuesday said it has agreed to acquire a leading European pharmacovigilance and regulatory services business named European PharmInvent Services SRO for an initial EUR4.8 million, potentially rising over the next three years dependent on performance.
The pharmceutical services and drug development company said PharmInvent will help to expand its existing pharmacovigilance division, PrimeVigilance, which has grown with a compound annual growth rate of 40% over the last four years.
Ergomed said PrimeVigilance is so far having a "very successful 2016".
PharmInvent offers drug safety and regulatory consultancy expertise and also has an extensive network of international pharmacovigilance experts that provide advice and support to pharmaceutical and generic companies around the world on product safety.
The current management of PharmInvent will remain in place after the acquisition has been completed. Ergomed believes combining PharmInvent with PrimeVigilance will create "one of the largest international specialist service providers in the highly regulated drug safety sector", and said it will enhance earnings from 2017 onwards.
"The enlarged business will have a broad international client list offering significant opportunities to cross sell, as well as an expanded range of services to attract new customers. From this strong position Ergomed's strategy is to actively expand the pharmacovigilance and regulatory division, especially in the US, thereby underpinning Ergomed's planned growth of revenues and group profitability," the company said.
The initial consideration for the deal is EUR4.8 million and an additional EUR3.2 million could be paid through to 2018 depending on PharmInvent's performance in terms of earnings before interest, tax, depreciation and amortisation.
All payments made will be split 80% cash and 20% shares. For the initial consideration, Ergomed is issuing 640,576 shares priced at 128.78 pence each. Admission is expected this Friday and the shares will represent about 1.58% on the company's enlarged issued share capital.
Ergomed shares were trading up 4.2% to 138.0 pence per share on Tuesday.
PharmInvent generated EUR3.0 million of revenue in 2015 to deliver adjusted Ebitda of EUR700,000. Net assets at the end of 2015 stood at EUR1.1 million.
Ergomed said PharmInvent is expecting revenue to rise by 35% in 2016 to about EUR4.0 million, while adjusted Ebitda, stripping out one-offs, will be about EUR800,000.
By Joshua Warner; [email protected]; @JoshAlliance
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