PRG.L Regulatory News (PRG)

7 Jun 2005 07:02

Premier Research Group07 June 2005 For Immediate Release 7 June 2005 Premier Research Group plc Acquisition of EPA Euro Pharma Auftragsforschung GmbH Introduction Premier Research Group plc (AIM: PRG) ("Premier Research", "Company" or "Group"), the international pharmaceutical services group today announces theacquisition of EPA Euro Pharma Auftragsforschung GmbH ("EPA") for an initialconsideration of £3.2 million (the "Acquisition"). EPA is a privately held contract research organisation (CRO) providing a broadrange of outsourced clinical services to the biotechnology and pharmaceuticalindustries. The Company is based in Kronberg near Frankfurt, Germany, andoffers expertise, experience and technology necessary to develop drugs fromPhase II to product registration in a timely and cost-efficient manner. For theyear ending 31 December 2004, EPA reported turnover of £2.2 million, andearnings before interest and taxation of £458,000. Rationale and benefits of the EPA Acquisition: • EPA represents an opportunity to supplement the organic growth of the Company through the acquisition of a well-established regional contract research organisation • EPA currently operates within the local German market and will provide the Company with access to the German pharmaceutical and biotechnology outsourcing market, traditionally a difficult market for non-German companies to break into • EPA is currently working with 34 customers providing a complementary fit with Premier Research's existing customer base • EPA will provide additional regulatory, statistical and medical expertise to complement the technical staff within Premier Research • EPA will provide a strategic footprint for Premier Research to access doctors and patients within the Eastern European CRO Market • The Directors anticipate the Enlarged Group will be able to achieve improved operating margins through regionalised monitoring of investigator sites, high value regulatory affairs and statistics and the integration of central overheads. Details of the Acquisition EPA was founded in 1971 and currently employs 41 people in the areas of clinicalresearch, data management and statistics, and regulatory affairs. EPA's level of contracted orders yet to be invoiced stood at approximately £2.2million as at 30 April 2005. The majority of these orders are with Germanpharmaceutical and biotechnology companies. However, EPA also has contacts withseveral of the world's largest multinational pharmaceutical groups. Premier Research's stated objectives in its acquisition growth strategy were toacquire companies with complementary customer bases and with clinical expertisein the Group's existing areas of focus, namely; oncology, CNS andanti-infectives. EPA satisfies both of these objectives. In the year ended 31December 2004, 52 per cent. of EPA's clinical revenues were from these threetherapeutic areas. Furthermore, like Premier Research, EPA employs a high levelof medical and scientific staff with more than 40% of employees holding PhD orMD qualifications. Financing of the Acquisition Premier Research has agreed to pay an initial consideration of approximately£3.2 million for EPA, payable in a mixture of cash and the issue of 3,666,667new ordinary shares of 1p each in the Company ("New Ordinary Shares"), togetherwith a further earn-out cash payment that the Directors of Premier Researchestimate will be up to £0.25 million, depending on EPA's level of turnoverduring the current year. The maximum level of deferred consideration is cappedat £1.85 million. Evolution Securities (acting as agent) has agreed to place the 3,666,667 NewOrdinary Shares issued as part consideration at 75p each with institutionalinvestors through a vendor placing (the "Placing") raising £2.75 million. Thebalance of the cash consideration will be satisfied through an extension to theCompany's existing loan facility. The placing price of 75p per New OrdinaryShare represents a discount of 10.7 per cent to the closing mid market price of84.0 pence per Ordinary Share at the close of business on 6 June 2005, being thelatest practicable date prior to this announcement. The New Ordinary Shares represent approximately 9.2 per cent of the Company'sexisting issued share capital and approximately 8.4 per cent of the Company'sissued share capital following the Placing. The New Ordinary Shares will rankpari passu in all respects with the existing ordinary shares of the Company.The Placing has been fully underwritten by Evolution Securities and isconditional upon, inter alia, the Admission of the New Ordinary Shares totrading on AIM. Accordingly, application has been made to the London Stock Exchange for thePlacing Shares to be admitted to trading on AIM. It is expected that Admissionwill become effective and dealings in the Placing Shares will commence on AIM on10 June 2005. Commenting on the acquisition, Dr Simon Yaxley, Chief Executive of PremierResearch said: "We are delighted with the acquisition of EPA which represents an important stepin our strategy of building a leading international contract researchorganisation. The combination of EPA's excellent reputation, strong medical andscientific staff and knowledgeable local management with Premier Research'sexisting international operations, offers a number of complementary synergies tothe enlarged Group and further strengthens Premier Research's position in theCRO market." Premier Research Group plcDr Simon Yaxley, Chief Executive Tel: 01344 458311Bernard Gallagher, Chief Financial Officer Tel: 01344 458309 Buchanan CommunicationsLisa Baderoon / Rebecca Skye Dietrich Tel: 020 7466 5000 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 approachto clinical management, the company has built a reputation with its customersfor delivery 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. Premier Research Group plc (PRG) listed on AIM on 3 December 2004. This information is provided by RNS The company news service from the London Stock Exchange