Acquisition of DUH

6 Jun 2006 07:02

Synexus Clinical Research PLC06 June 2006 Synexus Clinical Research PLC Acquisition of Diagnostic Units Hungary kft Acquisition allows Synexus to exploit growing opportunities in Central and Eastern Europe Synexus Clinical Research PLC ("Synexus" or "Company"), the clinical trialsservices group, today announces the acquisition of the entire issued sharecapital of Diagnostic Units Hungary kft ("DUH") for an initial consideration of€1.5 million plus a maximum deferred consideration of €1.25 million. This acquisition, the Company's second since joining AIM in November 2005,follows its stated strategy to build a multi-country operation, replicatingtheir UK capability of recruiting large numbers of patients into later stageclinical trials for the pharmaceutical industry. Information on DUH DUH is a Site Management Organisation based in Budapest, Hungary providingclinical trial services, particularly the recruitment and subsequent managementof patients onto later stage clinical trials for the pharmaceutical industry. Inthe twelve months to 31 December 2005, DUH reported unaudited turnover of£998,000 and profit after tax of £142,000. The value of the net assets acquiredby the Company is £528,000. Benefits of the acquisition • DUH represents a further 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 DUH, a well-established business operating in the same area of activity as Synexus, complements the organic growth of the Company. • The acquisition of DUH is expected to be earnings accretive for Synexus for the year to 31 March 2007. Details of the acquisition The maximum consideration of €2.75 million is satisfied as follows: • €1 million payable in cash on completion. • €0.5 million payable on completion by the issue of 362,976 new ordinary shares in Synexus at 95 pence per share. Application will be made as soon as practicable for these new ordinary shares to be admitted to trading on AIM. • €0.5 million deferred consideration payable in cash on the first anniversary of completion. • Up to a further €0.75 million payable in cash, dependent on the level of profit after tax of DUH for the year ending 31 March 2007. In order to earn the maximum level of consideration, DUH would have to achieve profit after tax of £258,620 in that year. Commenting on the acquisition, Michael Fort, Chief Executive of Synexus said: "I am very pleased to be able to report the completion of the purchase of DUH,which is a high quality clinic and the major recruiter of patients in Hungary.DUH is in a very exciting position both geographically and strategically andwill dovetail well into the Company's European group, which has seen thepurchase of SCM in Wroclaw, Poland and the opening of an office in Sofia,Bulgaria. The prospects from these centres alone are excellent as they enablethe Company to offer a pan-European solution to our clients who have significanthubs and head offices in mainland Europe. Additionally, the centres have varying specialities in their domestic marketsallowing us to widen the therapeutic areas offered to our clients. We willcontinue to look for similar types of acquisition opportunities over the comingmonths, with the active encouragement of our clients." Note An exchange rate of £1 : 385 HUF and £1 : 1.45 EUROS has been used in thisannouncement in relation to the financial information on DUH. Press enquiries Synexus Clinical Research plc Tel: +44 (0)1257 230723Michael Redmond, ChairmanMichael Fort, Chief Executive Biddicks - Financial Public Relations Tel: +44 (0)20 7448 1000Zoe Biddick Brewin Dolphin Securities Tel: +44 (0)845 270 8600Mark Brady/Sarah Kent This information is provided by RNS The company news service from the London Stock Exchange