PRG.L Regulatory News (PRG)

10 Jul 2006 07:01

Premier Research Group10 July 2006 For Immediate Release 10 July 2006 PREMIER RESEARCH GROUP ACQUISITION OF SCIREX LLC AND PLACING OF 5,172,413 NEW ORDINARY SHARES AT 145P PER SHARE Acquisition expands offering in the important US market Premier Research Group plc (AIM: PRG) ("Premier Research", "Company" or"Group"), the international pharmaceutical services group today announces theacquisition of 100 per cent. of the membership interests of Scirex CorporationLLC ("Scirex") for a consideration of US$30 million (£16.2 million) plus anamount equal to the value of excess working capital in the business atCompletion, up to a maximum amount of US$7 million (the "Acquisition"). This follows the Group's acquisitions of IMFORM in December 2005, PharmData inJuly 2005 and EPA Euro Pharma in June 2005 and continues the Company's statedstrategy of building an international business both organically and throughstrategically placed acquisitions. Information on Scirex Scirex is a full service contract research organisation (CRO) that specialisesin providing outsourced clinical services to the global biotechnology andpharmaceutical industries. The company is headquartered in Philadelphia, USA,and has offices located across the US, London, UK and Krakow, Poland. Scirexoffers expertise, experience and technology necessary to develop drugs fromPhase I to Phase IV. For the year ending 31 December 2005 Scirex recorded sales of £27.9 million andan EBIT of £729,000. Scirex has 10 offices worldwide and is headquartered inPhiladelphia, USA. Rationale and benefits of the Scirex Acquisition: • Scirex represents a further opportunity to complement the organic growth of Premier Research with the acquisition of a large, well-established full service US CRO working in the same therapeutic areas (particularly, central nervous system disorders). • Scirex is currently working with 55 customers, which are almost exclusively complementary to Premier Research's existing customer base. • The Acquisition will bring with it a significant signed order book (in excess of £17 million). • Scirex will provide a strategic footprint for Premier Research to access doctors and patients within the important US CRO Market. • Scirex has a strong network of monitors and doctor contacts for access to patients across the USA. It also provides additional statistical, scientific and medical expertise to complement the existing technical capabilities within Premier Research in the US, together with a well established network of clinics specialising in early phase analgesia clinical trials. • The Acquisition will be earnings enhancing to the Group this year. Financing the Acquisition Premier Research has agreed to pay a consideration of US$30 million(approximately £16.2 million) in cash plus the value of the excess workingcapital in the business up to a maximum amount of US$7 million. The Company hassecured £20 million of additional bank debt (the "New Facility") with which tofund the Acquisition initially. It has also completed a placing of 5,172,413 newordinary shares of 1p each in the Company ("New Ordinary Shares") to raise £7.5million ("the Placing"). The proceeds of the Placing will be utilisedimmediately upon receipt to reduce the amount drawn under the New Facility to£12.5 million. The maximum cost of the Acquisition (including the payment forexcess working capital) and the associated integration and other costs, isexpected to amount to no more than US$37 million, The additional funds requiredover and above £20 million will be funded from the Company's existing resources. The New Ordinary Shares represent approximately 9.42 per cent. of the Company'sexisting issued share capital and approximately 8.61 per cent. of the Company'sissued share capital immediately following the Placing and the Acquisition. TheNew Ordinary Shares will rank pari passu in all respects with the existingOrdinary Shares. The Placing has been fully underwritten by Evolution Securitiesand is conditional upon, inter alia, the admission of the New Ordinary Shares totrading on AIM ("Admission"). Accordingly, application has been made to theLondon Stock Exchange for the New Ordinary Shares to be admitted to trading onAIM. It is expected that Admission will become effective and dealings in the NewOrdinary Shares will commence on AIM on Wednesday 12 July 2006. Commenting on the Acquisition, Dr Simon Yaxley, Chief Executive of PremierResearch said: "We are delighted with the acquisition of Scirex which represents a furtherimportant step in our strategy of building a leading international contractresearch organisation. The Acquisition has many key attributes including the scale of deliverycapabilities we were looking for in the US, a complementary customer base and astrong order book, giving high visibility of future earnings. Importantly,Scirex has an enviable reputation and track record in evaluating new treatmentsfor pain and inflammation, neurological and psychiatric disorders and hasexcellent experienced staff in these therapeutic areas. I believe theAcquisition strengthens our business model and will further enhance our serviceoffering amongst our ever growing customer base." 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 SecuritiesSimon Leathers / Lloyd Thomas 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 Research is established inthree therapeutic areas - oncology, CNS (central nervous system) andanti-infectives - with a strong underlying expertise in paediatrics. Through afocused approach to clinical management, the Company has built a reputation withits customers for delivery of its services, and has demonstrated organic growthfollowing its recent acquisitions. Premier Research has also established itselfas an active participant in the consolidation activity within the sector. About Scirex The business is a contract research organisation (CRO) that specialises inclinical, data and statistical management and project management services forthe pharmaceutical, and biotechnology industries. The company's therapeuticfocus currently covers general medicine (e.g. cardiovascular, gastrointestinal),psychiatry and neurology and analgesia (CNS). Scirex was originally established in 1996 through a merger of BiomedicalResearch Group and National Medical Research Corp, both well establishedbusinesses offering full service contract research services. The business has grown significantly over the years, particularly, withoperations established in 8 locations in the US (Horsham, PA; Hartford, CT;Austin, TX; San Marcos, TX; Salt Lake City, UT; San Diego, CA; Tampa, FL; andChicago, IL), plus small offices in Guildford (UK) and Krakow (Poland). This information is provided by RNS The company news service from the London Stock Exchange