19th Jul 2005 07:01
Premier Research Group19 July 2005 For Immediate Release 19 July 2005 PREMIER RESEARCH GROUP ACQUISITION OF PHARMDATA INC AND PRE-CLOSE UPDATE Acquisition increases scope & scale of clinical data management offering Premier Research Group plc (AIM: PRG) ("Premier Research", "Company" or"Group"), the international pharmaceutical services group today announces theacquisition of PharmData, Inc. ("PharmData") for a maximum consideration of upto approximately £12.5 million (US$22.0 million) in cash and shares ("theAcquisition"). This follows the Group's acquisition of EPA Euro Pharma of Germany which wasannounced in early June 2005 and continues the Company's stated strategy ofbuilding an international business both organically and through strategicallyplaced acquisitions. The Company also today gives a pre-close trading update for the half year ending31 July 2005. Information on PharmData PharmData is a privately held contract research organisation (CRO) thatspecialises in clinical data management, statistical analysis, medical writing,electronic archiving and project management services for the pharmaceutical,biotechnology, and medical device industries. The business, which was set up in1994, is based in Atlanta, USA and employs 40 people. In the year to 31 December 2004, PharmData reported turnover of £6.2 million,profit before tax of £3.7 million and net assets of £0.95 million. The resultsfor that year included a number of substantial contracts with a single customerworth approximately £4.1 million in revenue, which have now been completed. In the six months to 30 June 2005, PharmData's unaudited management accountsshow revenue of approximately £1.5 million; however, PharmData has secured anumber of significant contracts from new customers during the period and theseare expected to contribute to increased revenues in the second half of the year. Reasons for the Acquisition PharmData currently operates solely within the US market and provides theCompany with increased scope and scale of data management services. Due to the specialist nature of its service offering, PharmData achieves ahigher operating margin than Premier Research's existing data managementoperations. PharmData's customer base, which comprises of largely US basedpharmaceutical and biotechnology companies, is almost exclusively complementaryto that of Premier Research's and there is considerable scope for cross-sellingopportunities, particularly in the Company's ability to offer clinical servicesto PharmData's customers who have, to date, secured this service elsewhere. Financing the Acquisition Premier Research is acquiring PharmData for a maximum consideration ofapproximately £12.5 million (US$22.0 million) in a mixture of cash and ordinaryshares of 1p in the Company ("Ordinary Shares"). The consideration is made up ofan initial consideration of £7.4 million (US$13.0 million) ("InitialConsideration") and further consideration of up to a maximum of approximately£5.1 million (US$9.0 million), payable in Ordinary Shares ("DeferredConsideration Shares") on the achievement of certain performance milestones inthe remainder of this calendar year. The Initial Consideration has been financed by a £2.3 million (US$4.0 million)vendor placing of 2,753,873 new Ordinary Shares and a £5.1 million (US$9.0million) term loan bank facility at a rate of interest of 1.75% above LIBOR. Thebank loan has been provided in US$ as this will provide a natural hedge for theforeign exchange risk associated with the US operations. The total number of Deferred Consideration Shares, which are be issued to thevendors of PharmData on the release of the Company's preliminary results for theyear ending 31 January 2006, comprises two tranches. The first tranche, whichbecomes payable if PharmData's EBITDA for the year ending 31 December 2005 isnot less than £1.45 million (US$2.53 million), will be satisfied by the issue of3,303,055 new Ordinary Shares, being approximately £2.8 million (US$5.0 million)at the closing middle market price of 86.5p per Ordinary Share at the close ofbusiness on 18 July 2005, being the last business date prior to thisannouncement. The number of Ordinary Shares that could be issued under thesecond tranche of the Deferred Consideration Shares will be calculated byreference to the extent that PharmData's EBITDA for the year ending 31 December2005 exceeds £1.45 million (US$2.53 million) and the prevailing price perOrdinary Share at the date of their issue and is subject to a maximum value ofapproximately £2.3 million (US$4.0 million). The Company is also placing 1,824,440 new Ordinary Shares at 83.0 pence to raiseapproximately £1.5 million to cover the costs of the Acquisition and to provideadditional working capital for PharmData's integration into the Group. In aggregate, therefore, 4,578,313 new Ordinary Shares ("New Ordinary Shares")have today been conditionally placed by Evolution Securities Limited (as agentfor the Company) with institutional investors (the "Placing"). The placing priceof 83.0 pence per New Ordinary Share represents a discount of 4.0 per cent. tothe closing middle market price of 86.5 pence per Ordinary Share at the close ofbusiness on 18 July 2005, being the last business date prior to thisannouncement. The New Ordinary Shares represent approximately 10.4 per cent. of the Company'sexisting issued share capital and approximately 9.5 per cent of the Company'sissued share capital immediately following the Placing and the Acquisition. TheNew Ordinary Shares and the Deferred Consideration Shares will rank pari passuin all respects with the existing Ordinary Shares. The Placing has been fullyunderwritten by Evolution Securities and is conditional upon, inter alia, theadmission of the New Ordinary Shares to trading on AIM ("Admission"). Accordingly, application has been made to the London Stock Exchange for the NewOrdinary Shares to be admitted to trading on AIM. It is expected that Admissionwill become effective and dealings in the New Ordinary Shares will commence onAIM on 21 July 2005. Application will be made to the London Stock Exchange forthe Deferred Consideration Shares to be admitted to trading on AIM once theaggregate number of Deferred Consideration Shares has been finalised dependentupon certain performance milestones being met. Pre-Close Trading Statement Prior to entering a close period in respect of the half year ending 31 July2005, Premier Research is issuing the following trading update. Overall, theGroup has traded well during the first half of the year and the Europeandivisions have continued to perform to plan with a number of new project wins.The integration of EPA is progressing as anticipated with the operating costs ofthe Group, as a whole, remaining on budget. Overall the performance of the Groupis in line with management's expectations. The CRO trading environment remains encouraging and the Board is confident inthe prospects for the Group as a whole and continues to believe that PremierResearch will achieve a satisfactory outcome for the year. The Company expectsto release its interim results for the half year ending 31 July 2005 in October2005. Commenting on the Acquisition, Dr Simon Yaxley, Chief Executive of PremierResearch said: "We are delighted with the acquisition of PharmData which represents animportant step in our strategy of building a leading international contractresearch organisation. The combination of PharmData's excellent reputation,strong data management, statistical expertise and sophisticated IT and projectdelivery processes with Premier Research's existing US and internationaloperations offers a number of complementary synergies to the enlarged Group andfurther strengthens Premier Research's position in the international CROmarket."Premier Research Group plcDr Simon Yaxley, Chief Executive Tel: 01344 458311Bernard Gallagher, Chief Financial Officer Tel: 01344 458309 Buchanan Communications Tel: 020 7466 5000Lisa Baderoon / Rebecca Skye Dietrich email: [email protected] Evolution SecuritiesMatt Wood /Simon Leathers Tel: 020 7071 4300 Notes to editors: About Premier Research Premier Research is a growing contract research organisation (CRO) involved inthe design and execution of clinical trials (Phases II-IV) on behalf ofpharmaceutical and biotechnology companies. Premier is established in threetherapeutic areas - oncology, CNS (central nervous system) and anti-infectives -with a strong underlying expertise in paediatrics. Through a focused approach toclinical management, the company has built a reputation with its customers fordelivery of its services, and has demonstrated organic growth following itsrecent acquisitions. Premier has also established itself as an activeparticipant in the consolidation activity within the sector. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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