TIDMINS
RNS Number : 5014E
Instem plc
13 May 2013
13 May 2013
Embargoed for 07:00
Instem plc
("Instem", the "Company" or the "Group")
Acquisition of Logos Technologies
Strategic expansion into the early phase clinical market extends
addressable market & increases cross selling opportunities
Instem plc (AIM: INS.L), a leading provider of IT applications
to the global early development healthcare market, today announces
the acquisition of the entire issued share capital of Logos
Holdings Limited along with its subsidiaries Logos EDC Solutions
Limited and Logos Technologies Inc ("Logos"), for an initial cash
consideration of GBP0.55 million (the "Acquisition"). A further
consideration of up to GBP4.45 million will be payable subject to
performance, in a mixture of cash and shares at the Company's
discretion.
The Acquisition represents a strategic move by Instem into the
early phase clinical market and is expected to be earnings
enhancing in the first full financial year of ownership.
Logos' ALPHADAS(R) software suite is the market leading,
e-source data capture system and site automation software suite for
early phase clinical studies. Headquartered in London, UK, and with
employees in the US and Europe, Logos' ALPHADAS is believed to have
been selected for the majority of new business placed in the early
phase market in the last three years. Clients include SNBL CPC Inc,
PharmaMedica Research and Spaulding Clinical. Logos' revenue for
the year ended 30 September 2012 was GBP0.75 million, an increase
of 114% on the prior year, delivering EBITDA of GBP65k with gross
assets of GBP166k as at 10 May 2013. Logos sells its software
through a variety of licence and usage models and currently has an
annual recurring revenue base of approximately GBP367k. All of
Logos' management team and employees will be joining the Instem
Group.
The early phase clinical market is much less automated in terms
of data capture and analysis than Instem's core pre-clinical
market, with larger clinics typically not yet fully automated and
the majority of smaller clinics still using paper records. This
represents a significant emerging market opportunity for both the
Logos and Instem software suites.
The broader coverage of the early development domain will enable
Instem to bid for larger opportunities spanning early clinical as
well as pre-clinical client workflows and is expected to increase
the strategic importance of Instem to its clients, enhancing client
retention and improving the probability of Instem being considered
for future business.
There is currently little overlap between the two customer
bases, providing the opportunity for cross-sale of certain modules
from Instem's Provantis and Centrus suites into the Logos customer
base and of certain elements of the ALPHADAS suite into Instem's
pharmaceutical customers. Logos will also benefit from Instem's
global sales and marketing capability.
Entry into the early clinical market not only expands Instem's
addressable market, but also provides greater access to early phase
clinical data in both healthy and patient populations, enhancing
the potential of Instem's translational informatics solutions.
The initial cash consideration of GBP0.55 million will be funded
from Instem's existing cash balances. The maximum performance based
consideration payable in connection with the Acquisition is GBP4.45
million, the earn-out being contingent upon the performance of the
acquired business against challenging profit targets over the next
four years.
The maximum proportion of the total consideration payable in
shares is approximately 50% and, save for the initial earn-out
payment that covers the period to 31 December 2013, the issue of
share based payments is entirely at Instem's discretion. Any shares
issued to the sellers will be subject to customary lock-in and
orderly market arrangements. Subsequent earn-out payments will be
assessed over successive twelve month periods following the date of
acquisition, with each payment subject to minimum performance
criteria and a cap. Instem will make appropriate provision for
current and long term contingent consideration amounts which it
reasonably expects to pay, with such amounts subject to periodic
review and update depending on the actual and expected performance
of the acquired business.
Giles Wilson, CEO & Founder of Logos Technologies,
stated:
"Instem has a fantastic reputation in the pharmaceutical
industry for quality software solutions and outstanding customer
support. We are delighted to be joining the Instem group and
welcome the global reach and blue chip customer base they will
provide us, helping us to achieve our next stage of growth as we
seek to capitalise on our strong market position."
Phil Reason, CEO of Instem plc, further commented:
"This earnings-enhancing acquisition is an important part of our
growth strategy. Logos' ALPHADAS suite is an acknowledged leader in
the early phase e-source data capture industry and the integration
of the business expands our product portfolio, increases our market
opportunity and provides avenues for additional cross-sales of our
Provantis and Centrus suites. We are delighted that the talented
team at Logos will be joining the Instem group and we look forward
to working together to provide valuable automation tools to enable
our clients to bring new products to market quickly and cost
effectively."
For further information, please contact:
Instem plc +44 (0) 1785 825 600
Phil Reason, CEO
Nigel Goldsmith, CFO
N+1 Singer (Nominated Adviser
& Broker) +44 (0) 20 7496 3000
Aubrey Powell
Joe Stroud
Newgate Threadneedle +44 (0) 20 7653 9850
Caroline Evans-Jones
Fiona Conroy
About Instem plc
Instem is a leading supplier of IT applications to the early
development healthcare market delivering compelling solutions for
data collection, management and analysis across the R&D
continuum. Instem applications are used by customers worldwide,
meeting the rapidly expanding needs of life science and healthcare
organisations for data-driven decision making leading to safer,
more effective products.
Instem's portfolio of software solutions increases client
productivity by automating study-related processes while offering
the unique ability to generate new knowledge through the extraction
and harmonisation of actionable scientific information.
Instem supports its clients through full service offices in the
United States, United Kingdom and China with additional locations
in India and a full service distributor based in Japan.
To learn more about Instem solutions and its mission, please
visit www.instem.com or its investor centre
http://investors.instem.com/
About Logos Technologies
Logos Technologies is a leading provider of world-class clinical
trial solutions to pharmaceutical, biotechnology and clinical
research organisations. ALPHADAS(R) is a proactive eSource clinical
trials system that is mobile, schedule-driven, and provides
real-time bedside or station based direct data capture. It meets
the changing demands and time sensitive nature of early phase
trials while integrating with clinical and laboratory operations.
It accelerates data throughput, and enhances data integrity. With
headquarters in London, UK, the company has staff in the UK,
mainland Europe and the US.
For more information, please visit:
www.logostechnologies.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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