TIDMINS
RNS Number : 9946I
Instem plc
05 September 2016
Instem plc
("Instem")
Earnings Enhancing Acquisition of Notocord(R) Systems SAS
("Notocord")
Acquisition of software provider in pre-clinical studies
Instem (AIM: INS.L), a leading provider of IT solutions to the
global early development healthcare market, announces that it has
acquired Notocord(R) (the "Acquisition"). The total consideration,
to be satisfied in cash, will be up to EUR4.2m, net of any cash
acquired adjusted for a normalised level of working capital. The
Acquisition is expected to be immediately earnings enhancing.
The consideration comprises EUR2.0m on completion (the "Initial
Consideration"), and up to a further EUR2.2m, which is payable
contingent upon the achievement of certain targets, including the
future financial performance of Notocord (the "Earn Out"). Further
information on the terms of the Acquisition is set out below.
About Notocord
Founded in 1989, Notocord(R) is based in Paris, France and New
Jersey, United States with 16 employees. The company provides
software solutions for data acquisition and analysis and is a
highly respected name in the life sciences software industry.
Notocord(R) solutions are used every day by top scientists for
new drug development research within discovery, safety pharmacology
and toxicology studies. Its most widely used solution is
Notocord-hem(R), a telemetry-based safety pharmacology data
collection system for preclinical studies, which is recognised as a
leading software solution for cardiovascular, respiratory,
electrophysiology and nervous system research.
Notocord(R) has sold more than 1,500 licences around the world
to major pharmaceutical companies, contract research laboratories,
hospitals and academic research centres. Customers include Sanofi,
Merck & Co and Pfizer.
In its last financial year ended 31st December 2015, Notocord(R)
reported sales of EUR2.25m and operating profits of EUR0.7m and the
Acquisition is expected to be earnings enhancing in 2016. As at 31
May 2016, Notocord(R) had pro forma net assets of approximately
EUR0.03m, with no debt. The pro forma net assets are based on a
normalised level of working capital and exclude cash distributed to
the shareholders of Notocord prior to completion.
Acquisition Rationale
An important element of Instem's stated strategy is to
consolidate key niche software providers across the Pharmaceutical,
Government Research, Medical Device, Chemical and Agrochemical
industries to extend its market leadership in data acquisition,
management, analysis and transmission of early development data.
The acquisition of Notocord(R) is a further significant step in the
execution of this strategy. Ultimately, Instem's clients will be
able to bring life-enhancing products to market quicker and more
cost effectively.
Version 3.1 of the Standard for the Exchange of Non-clinical
Data ("S") was published on 27 June 2016 and includes the
requirements for Safety Pharmacology studies for the first time, in
addition to the requirement for electrocardiogram data associated
with toxicity studies supported by the current S 3.0 standard.
Following the acquisition of Notocord(R), Instem is uniquely
positioned to address the requirements of S across the key
application areas of pre-clinical drug research data collection,
analysis, management and submission of test data to the FDA under
the new S mandate.
The Acquisition will enable Instem to enhance its existing
submit(TM) solution, accelerate the integration of other key data
collection sources and further differentiate this market leading
solution. It will also increase Instem's deep domain expertise in
another key area of data required in a S submission, which is a
strong competitive advantage for Instem's growing out-sourced S
conversion services business.
Notocord(R) will immediately be able to capitalise on Instem's
global marketing, sales and support capabilities while ensuring
that its track record for delivering high-quality and highly
reliable products continues to meet all of its clients'
requirements.
The Notocord(R) team and its applications will be integrated
into Instem's Preclinical Study Management Solutions group, which
provides focused software solutions that empower organisations of
all sizes to more effectively collect, review, analyse and manage
preclinical safety evaluation study data.
Terms of the Acquisition
The Initial Consideration of EUR2.0m is being funded from
existing cash resources following the fundraise earlier in 2016.
The Earn Out of up to EUR2.2m will also be satisfied in cash, if
payable, and comprises:
-- up to EUR0.85m, payable in March 2017 dependent on
Notocord(R) achieving certain revenue and earnings targets for the
year ending 31 December 2016;
-- up to EUR0.40m, payable during 2017 dependent on Notocord(R)
delivering certain product line business targets;
-- approximately EUR0.20m, payable during 2017, dependent on the
receipt of R&D tax credits for qualifying investments made by
Notocord between 1(st) January 2016 and 2(nd) September 2016;
and
-- up to a further EUR0.75m, payable in March 2018, dependent on
Notocord(R) delivering certain product line business targets.
Philippe Zitoun, founder and Chief Executive Officer of
Notocord(R), said: "Our mission all along was to create technology
that was easier and faster to use so our clients can do what they
do best, every day. Since we were founded, we have relied on
innovative and creative thinking to understand tomorrow's needs in
the marketplace. Becoming part of Instem allows us to deliver more
value, more quickly and to more users everywhere. The entire team
here at Notocord(R) is excited to be supported by a full complement
of resources across Instem's eleven international offices. Instem
shares in our commitment to excellence and is also well known for
highly satisfied clients throughout all of the segments that they
serve."
Phil Reason, CEO of Instem plc, commented: "Notocord(R) has a
stellar reputation and a high quality team. Having known Philippe
and their solutions for many years, we are confident that we will
be successful together and that our clients will be very encouraged
by the combination of two complementary offerings. As experts in
safety pharmacology, the Notocord(R) team joins us just as this
becomes a significant additional focus area for S, one of our
largest growth opportunities over the next few years. There are
also some disruptive innovations in the safety pharmacology market
at the moment which are potentially highly beneficial for Instem,
so the timing is just right to bring Notocord(R) into the group. We
are in a strong position to increase the global reach and
penetration of the existing Notocord(R) products while helping the
team to launch new and exciting solutions."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
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
Richard Lindley
Nick Owen
James White
Walbrook Financial PR +44 (0) 20 7933 8780
Paul Cornelius instem@walbrookpr.com
Helen Cresswell
Sam Allen
Paul Whittington
About Instem
Instem is a leading supplier of IT applications and services to
the early development healthcare market delivering compelling
solutions for data collection, analysis and regulatory submissions
management. Instem solutions are in use 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 over 500 clients through offices in the United
States, United Kingdom, France, Japan, China and India.
To learn more about Instem solutions and its mission, please
visit www.instem.com
More About Notocord
NOTOCORD(R) develops software solutions that help power the
processes within the preclinical phase of drug development. Trusted
by leading commercial research organisations, universities and
government institutes, the NOTOCORD(R) solution suite includes:
NOTOCORD-hem(R) - an advanced software platform designed to
acquire, display and analyse physiological signals. Covering
Cardiovascular, Respiratory and Nervous system research areas,
NOTOCORD-hem(TM) offers:
-- Over 160 modules for a customised analysis
-- In vivo, In vitro and Ex vivo
-- Implants and non-invasive telemetry
-- Simultaneous acquisition from different sources and systems
-- Flexible user interfaces offering easy configuration and displays
-- Ultra-fast access to data regardless of experiment file size
-- Compliance with regulatory standards
NOTOCORD-fps(R) - a solution based on a new Field Potential
Analysis (FPS) method for analysis supporting an upcoming change in
an industry standard for novel safety screening using stem cell
data. The Comprehensive in vitro Proarrhythmia Assay, or CiPA, is
being considered by regulators and industry work groups and is
expected to act as a prerequisite for all non-cardiac drug
marketing approvals. The CiPA initiative is intended to move safety
pharmacology from a predominantly traditional pharmacodynamics
approach to in silico and in vitro drug toxicity assessment.
NOTOCORD-sense(R) - the next generation platform encompassing
new features for its hem and fps solutions along with new exciting
capabilities.
To find out more information about NOTOCORD(R) solutions, please
visit www.notocord.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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