LONDON (Alliance News) - Venn Life Sciences Holdings PLC Tuesday said it has bought French clinical research organisation Cardinal Systems SAS, a move it expects to boost earnings from year one and bolster its own capabilities with data management and randomisation services.
In a statement, Venn said it has bought EUR200,000 new shares in Cardinal and EUR272,780 of existing shares, giving it a 79.8% stake in the business. It will buy another EUR200,000 worth of new Cardinal shares on September 30, raising its stake to 85.2%. It then has a call option on the remaining 14.8% stake, and the consideration for this stake will depend on Cardinal's financial performance in the year to September 30, 2015.
It said it will pay for the Cardinal shares from existing cash resources.
Cardinal made a pretax loss of EUR444,000 in the year to September 30, 2013, but had undertaken a significant restructuring since then and is the acquisition is therefore expected to be earnings enhancing for Venn from the first full year after the deal completes.
"Cardinal is well known for its enhanced technological systems and adeptness at managing multiple sites and has an active global client base including large & mid-sized pharmaceutical companies, governmental organisations, non-profit organisations and biotechnology firms. The addition of these services as a core service offering further emphasises Venn's status as a full service pan-European CRO," Venn said in a statement.
The deal was done in response to customer demands for Venn to be able to offer a complete service package, and has already been welcomed by potential new customers, Chief Executive Tony Richardson said.
"The combination of Cardinal's IT expertise with Venn's extensive clinical trial management experience enables us to offer our sponsors a more holistic approach to managing their trials. Our sponsors have highlighted to us in recent times the importance of having these services under the one roof and we moved quickly to find a suitable company that fits into the Venn organisation," he said.
"This enhances our growth opportunities as a company as we can target a wider portfolio of studies and we have already encountered positive feedback from potential customers in anticipation of this kind of deal," the CEO added.
Venn Life Sciences shares were up 4.5% at 17.77 pence Tuesday morning.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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