PRG.L Regulatory News (PRG)

19 Dec 2005 07:01

Premier Research Group19 December 2005 Final Release 19 December 2005 PREMIER RESEARCH GROUP ACQUISITION OF IMFORM Acquisition expands offering into important Central and Eastern Europe territories Premier Research Group plc (AIM: PRG) ("Premier Research", "Company" or "Group"), the international pharmaceutical services group today announces theacquisition of the business and assets of IMFORM GmbH ("IMFORM") for a totalconsideration of up to €7.0 million ("the Acquisition"). This follows the Group's acquisitions of EPA Euro Pharma of Germany in June 2005and US based PharmData in July 2005 and continues the Company's stated strategyof building an international business both organically and through strategicallyplaced acquisitions. Information on IMFORM IMFORM is a privately held full service contract research organisation (CRO)that specialises in providing outsourced clinical services, including; clinicaldata management, medical writing and quality assurance, to the biotechnology andpharmaceutical industries. The Company is based in Darmstadt, near Frankfurt,Germany, and has offices located across Eastern Europe. IMFORM offersexpertise, experience and technology necessary to develop drugs from Phase I toPhase IV. In the 9 months to 30 September 2005, IMFORM reported unaudited netrevenues of c. €8.0 million, negative EBITDA of approximately €149,000 and a pretax loss of approximately €341,000. The purchase value of the net assets beingacquired is approximately £169,000. Rationale and benefits of the IMFORM Acquisition: • IMFORM represents a further opportunity to complement the organic growth of Premier Research with the acquisition of a well-established full service Central and Eastern European CRO working in the same therapeutic areas. • IMFORM is currently working with 20 customers, 19 of whom will be new customers to Premier Research • The Acquisition will bring with it a significant signed order book (in excess of €17 million), including a recent contract win worth €2.7 million • IMFORM will provide a strategic footprint for Premier Research to access doctors and patients within the important Eastern European CRO Market • Significant cost savings are anticipated to be realised following the acquisition of the business and assets and, although the transaction is expected to marginally reduce earnings for the year ending 31 Jan 2006, the Directors of Premier Research are confident that the Acquisition will become earnings enhancing to the Group thereafter. • IMFORM will provide additional statistical, scientific and medical expertise to complement the existing technical capabilities within Premier Research, together with a well established safety and pharmacovigilance group Financing the Acquisition Premier Research has agreed to pay a total consideration of up to approximately€7.0 million for the business and assets of IMFORM. The consideration isstructured so that there is an initial cash payment of €2.0 million to satisfyan existing liability of IMFORM, which will be funded out of the Group'sexisting cash resources and an extension to the Group's existing borrowingfacilities. Following Completion, and on a schedule still to be agreed, furtherconsideration of up to Euros 5.0 million will become payable. Of this,approximately Euros 2.2 million will be required in order to fund the repaymentof billings in advance on an existing customer contract. Up to Euros 2.8million will be payable dependant upon the financial performance of the businessand assets acquired in the twelve months to 31 December 2006. Commenting on the Acquisition, Dr Simon Yaxley, Chief Executive of PremierResearch said: "We are delighted with the acquisition of IMFORM which represents a furtherimportant step in our strategy of building a leading international contractresearch organisation. We are particularly pleased to have been able tostructure the Acquisition to enable us to use our existing cash and debtfacilities at this time. The Acquisition has many key attributes including a complementary customer baseand a strong order book, giving high visibility of future earnings. Importantly,I believe that following this Acquisition Premier Research can now provide morecomprehensive geographical coverage for access to patients than the majority ofits larger competitors, a position which I believe strengthens our businessmodel and which will further enhance our service offering amongst our evergrowing customer base." 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: lisab@buchanan.uk.com 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. About IMFORM The business is a contract research organisation (CRO) that specialises inclinical data management and project management services for the pharmaceutical,biotechnology, and medical device industries. IMFORM has 144 employees. The IMFORM Group was originally established in 1991 to take advantage of CROopportunities following the fall of the Berlin Wall after the founders hadidentified that former eastern bloc countries were untapped resources forundertaking clinical trials providing high quality work at lower costs. The business has grown significantly over the years, particularly, withoperations established in Prague (1994), Warsaw (1998), Austria, Bratislava andBudapest (2000), and Sofia, Bucharest, Moscow, London and Kiev in 2004. Otherthan Austria, all customer contracts are with GmbH in Germany, with thesubsidiaries servicing those contracts. This information is provided by RNS The company news service from the London Stock Exchange