Acquisition of Quadramed Ltd

9 Feb 2006 07:01

Fulcrum Pharma PLC09 February 2006 For immediate release 9 February 2006 FULCRUM PHARMA PLC ("the Group" or "the Company") Strengthens regulatory services by acquisition of Quadramed Ltd Fulcrum Pharma plc (AIM: FUL), the drug development and strategic outsourcingservices company, is pleased to announce the acquisition of Quadramed Ltd ("Quadramed"), a regulatory consultancy business, for a maximum totalconsideration of £1.6 million based on net assets of £300,000, in a combinationof shares, loan notes and cash. The deal's terms include an initial payment of£1.1 million and a performance based earn-out. The acquisition of Quadramed is the first step in the delivery of Fulcrum'sstrategic objective of deepening its expertise in regulatory services. Quadramed significantly strengthens Fulcrum's existing regulatory servicescapability, both by expanding capacity and by broadening the Company's range ofservices into marketing authorisation submissions. The acquisition is alsoexpected to broaden the customer base as there is little overlap between theclients of Fulcrum and Quadramed. Fulcrum will look to develop its expertise andoffering in the regulatory consultancy business both organically and by makingfurther acquisitions where suitable opportunities arise. Quadramed, which was founded in 1991, is a provider of regulatory consultancyservices relating to clinical trials, marketing authorisation submissions andpost-approval maintenance. Its clients include biotechnology and pharmaceuticalcompanies in both Europe and the US. Quadramed, which is based in Midhurst, West Sussex, has business relationshipswith a network of regulatory consultancies across Europe. In the year ending30th June 2005, Quadramed reported sales of £1,360,000, profits before tax anddirectors' remuneration of £466,000 and net assets of £133,000. Under the sale and purchase agreement, the initial consideration of £1.1 millionis to be satisfied as follows: £50,000 in cash, £700,000 by the issue of loannotes (of which £500,000 are guaranteed), £250,000 by the issue of 6,666,667 newordinary shares in the Company, and £100,000 by the issue of EMI share optionsto Quadramed employees. The earn out is based on the turnover of Quadramed in the first 12 monthsfollowing completion of the acquisition. If the turnover in the period is £1.3million or less, no deferred consideration is payable. Thereafter, a deferredconsideration will be paid on a pound for pound basis for turnover above £1.3million, up to a maximum of £500,000. The deferred consideration will besatisfied by the issue of loan notes by the Company. Application has been made for the 6,666,667 new ordinary shares to be admittedto AIM and admission is expected to occur on 14 February 2006. Jon Court, Chief Executive of Fulcrum Pharma, said: "This earnings enhancingacquisition delivers a key strategic objective and strengthens a part of ourbusiness that we have identified as offering growth potential. I would like towelcome the Quadramed team to Fulcrum and look forward both to the synergies ofthe acquisition and to offering a broader service to our clients." Chris Brooks, Managing Director of Quadramed, said: "Fulcrum offers a uniqueapproach to drug development and we are very excited about joining the Group. Welook forward to developing further our regulatory affairs services which willbenefit both our existing clients and Fulcrum's clients." For further information, please contact: Fulcrum Pharma PLC Tel: 0870 710 7152Jon Court, Chief Executive Buchanan Communications Tel: 020 7466 5000Mary-Jane Johnson This information is provided by RNS The company news service from the London Stock Exchange