INS.L Regulatory News (INS)

Instem plc

("Instem", the "Company" or the "Group")

Earnings Enhancing Acquisition of Samarind Limited ("Samarind")

Acquisition of Regulatory Information Management Solutions Provider, Issue of Equity

and Total Voting Rights

Instem (AIM: INS.L), a leading provider of IT solutions to the global early development healthcare market, announces the acquisition of UK-based Samarind (the "Acquisition"), for a total consideration of up to £2.5m, to be satisfied by a combination of cash and new ordinary shares in the Company. The Acquisition is expected to be earnings enhancing in 2016 and going forward.

The consideration comprises £1.5m on completion (the "Initial Consideration"), £0.65m of deferred consideration (the "Deferred Consideration") and up to a further £0.35m which is payable contingent upon the financial performance of Samarind (the "Earn Out"). Further information on the terms of the Acquisition is set out below.

About Samarind

Samarind is based in Deeside, UK and provides Regulatory Information Management ("RIM") software ("Samarind RMS") and services to the life sciences sector. Its solutions significantly enhance the quality of regulatory information and help to achieve and maintain compliance for pharmaceutical, biotech and medical device products. Samarind has 10 employees.

The Samarind RIM software and services provide the security, flexibility and ease of use that regulatory affairs teams need to achieve and exceed their regulatory and commercial requirements. Deployed on-site or accessed on-line, Samarind's solutions provide a smarter way to manage the acquisition and maintenance of product licences.

The Emerging Market Opportunity

The European Medicines Agency ("EMA") is currently in the process of implementing the standard developed by the International Organisation for Standardisation ("ISO") for the Identification of Medicinal Products ("IDMP"). This is a set of common global common standards for data exchange, formats and terminologies for the unique identification of medicines.

Samarind worked extensively with the EMA on the original EVMPD standard in 2005 and was first to market with a fully working EVMPD solution.

Importantly, Samarind's RIM solution has been designed to adapt to each iteration of the EMA implementation of IDMP, which will replace EVMPD and is expected to evolve into a global standard as the guidelines are published.

Acquisition Rationale

The Acquisition extends Instem's portfolio of leading data exchange and management software solutions and provides additional opportunities to provide out-sourced regulatory services.

Instem will integrate Samarind quickly and will be targeting increased market penetration in specific functional and geographic sectors. Instem, which is already working directly with many regulatory departments on SEND (the Standard for the Exchange of Non-clinical Data), will introduce Samarind RMS to its client base so as to deliver more commercial value and regulatory power to these relationships.

In its last financial year ended 31 March 2016, Samarind reported sales of £1.2m and operating profits of £0.4m and the acquisition is expected to be earnings enhancing in 2016. As at 27 May 2016, Samarind had net assets of approximately £0.04m, including £0.68m of cash, with no debt.

Terms of the Acquisition

The Initial Consideration is being satisfied by £1.3m in cash and £0.2m in new ordinary shares of 10 pence each in the Company (the "Initial Consideration Shares"). The cash is being funded from existing resources following the fund raise earlier in 2016.

The Deferred Consideration, to be satisfied in a combination of cash and shares (at Instem's discretion), comprises £0.45m which is payable in May 2017 (up to £0.175m in shares) and £0.2m which is payable in May 2018 (up to £0.1m in shares).

The Earn Out comprises up to £0.35m payable in cash, contingent upon the profits of Samarind in the first twelve months post Acquisition and, if achieved, would be payable in the second half of 2017. 

Application will be made to the London Stock Exchange for the admission of the 86,393 Initial Consideration Shares and admission is expected to take place at 8.00 a.m. on or before 6 June 2016.

Total Voting Rights

Following the issue and allotment of the above Initial Consideration Shares, the Company's issued share capital comprises 15,702,452 ordinary shares of 10 pence each. The Company does not hold any ordinary shares in treasury, therefore the total number of voting rights in the Company is 15,702,452.

The figure of 15,702,452 may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change of their interest in, the Company under the FCA's Disclosure and Transparency Rules.

Dr. Olaf Schoepke, Vice President, Regulatory Solution Development at Samarind, stated: "On behalf of our clients and staff, we couldn't be happier to be part of the Instem group and the transformation they are leading in health and life sciences. This acquisition by Instem brings core regulatory submission and regulatory information management capabilities together so we can expand the value and impact that we bring to our client partners."

Phil Reason, CEO of Instem plc, further commented: "Samarind aligns perfectly with our strategy of expanding organically and acquisitively into adjacent market areas, particularly those having strong regulatory drivers for technology adoption. Although the Samarind solutions have relevance to product research and development, the larger segment of the market is for marketed drugs and medical devices, enabling Instem to tap into new areas of market expenditure. Our global presence is also a key asset to the Samarind business."

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About Instem

Instem is a leading supplier of IT applications to the early development healthcare market delivering compelling solutions for data collection, management and analysis across the R&D continuum. Instem applications are in use by customers worldwide, meeting the rapidly expanding needs of life science and healthcare organizations for data-driven decision making leading to safer, more effective products.

Instem's portfolio of software solutions increases client productivity by automating study-related processes while offering the unique ability to generate new knowledge through the extraction and harmonization of actionable scientific information.

Instem supports over 450 clients through offices in the United States, United Kingdom, Japan, China and India.

To learn more about Instem solutions and its mission, please visit www.instem.com