Acquisition

31 Jan 2006 08:00

Synexus Clinical Research PLC31 January 2006 Synexus Clinical Research PLCAcquisition of Skandynawskie Centrum Medyczne Sp. z o.o. Acquisition allows Synexus to exploit growing opportunities in Central andEastern Europe Synexus Clinical Research PLC ("Synexus" or "Company"), the clinical trialsservices group, today announces the acquisition of the entire issued sharecapital of Skandynawskie Centrum Medyczne Sp. z o.o. ("SCM") for a maximum totalconsideration of up to £2,250,000, plus the assumption of loans. This acquisition, the Company's first since joining AIM in November 2005,follows the Company's stated strategy of expansion through selectiveacquisitions, concentrating on Synexus' core activity of patient recruitment forlater stage clinical trials, with particular focus on the exploitation ofgrowing opportunities for clinical trials and patient recruitment in emergingeconomies. Information on SCM SCM provides clinical trial services for the pharmaceutical industry, managingpatients in clinical trials on behalf of pharmaceutical companies and contractresearch organisations. The business is based in Wroclaw, Poland and at presentSCM's main focus is on clinical trials aimed at prevention and treatment ofosteoporosis. In the ten months to 31 October 2005, SCM reported unaudited netrevenues of £425,000 and profit before tax of £130,000. The value of the grossassets acquired is £335,000 and the value of loans assumed by the Company oncompletion is expected to be £245,000. Benefits of the acquisition • SCM represents an opportunity for the Company to exploit the growing opportunities for clinical trials and patient recruitment in emerging Central and Eastern European markets. • The acquisition of SCM, a well-established business operating in the same area of activity as Synexus, complements the organic growth of the Company. • SCM contracts with a number of customers in the pharmaceutical industry who are not currently customers of the Company. • SCM has licences to open further centres in Poland and the opportunity to open in neighbouring Ukraine. • The acquisition of SCM is expected to be earnings accretive for Synexus for the first full financial year. Details of the acquisition The maximum consideration of £2,250,000 will be satisfied as follows: • £850,000 payable on completion by the issue of 1,042,945 new ordinary shares in Synexus. Application will be made as soon as practicable for these new ordinary shares to be admitted to trading on AIM. • Up to a further £1,400,000 payable in cash and ordinary shares, dependent on the level of profit after tax of SCM for the year ending 31 March 2007. In order to earn the maximum level of consideration, SCM would have to achieve profit after tax of £387,500 in that period. • Up to £150,000 of the loans to be repaid during the earn-out period with any outstanding balance to be repaid by no later than 31 December 2007. Commenting on the acquisition, Michael Fort, Chief Executive of Synexus said: "We are delighted to be able to announce the acquisition of SCM which willenhance Synexus' business by broadening the service that the Company can offerto its customers. The clinical trials market is increasingly expanding into emerging economies andSynexus is actively looking at these markets. We believe that the acquisition ofSCM will provide us with a stepping stone to further expansion in Central andEastern Europe both through organic growth and further acquisitions. The acquisition of SCM and our partnership recently announced in India representour intent to implement our strategic aim of developing capability in emergingeconomies on a fast track basis. This response to market developments will bewell received by our customers and will provide the Company with a platform tostrengthen sales and profits in the future." Note An exchange rate of £1 : PLN5.6 has been used in this announcement in relationto the financial information on SCM. This information is provided by RNS The company news service from the London Stock Exchange