Ergomed Plc (LON:ERGO) has unveiled an earnings enhancing bolt-on to its pharma services business that will cost it up to £6.8mln.
It is acquiring PharmInvent Services for an initial £4.8mln with 80% of the sum paid in cash and the remainder in equity.
It will also hand over up to a further £2.7mln based on the business hitting certain operating profit targets between now and the end of 2018.
The acquisition bulks up the company’s successful PrimeVigilance unit, which specialises pharmacovigilance, which is the process of monitoring drugs once they have been licenced for use.
"This synergistic acquisition of PharmInvent both complements and consolidates PrimeVigilance's market-leading position in outsourced pharmacovigilance services for clients developing or selling drug products across the world,” said Ergomed chief executive Miroslav Reljanovic.
“Combining these companies offers an expert and complete solution for clients and is consistent with our strategy to accelerate further this strongly growing part of our service business that addresses an expanding, multi-billion dollar market.
“We are therefore confident that this earnings accretive deal will quickly translate into significant and sustainable shareholder value.”
Founded in 2010 by doctors Jan Petracek and Martin Votava, in Prague, PharmInvent offers pharmacovigilance and regulatory services to over 100 clients.
In the year ended last December it reported revenues of £2.6mln, giving adjusted earnings before interest, tax, depreciation and amortisation of £600,000.