Ergomed plc has announced the acquisition of Ashfield Pharmacovigilance Inc from UDG Healthcare US Holdings, Inc., the US operating subsidiary of UDG Healthcare plc. Ergomed has acquired the entire issued share capital of Ashfield PV for a total cash consideration of $10 million. It will join Ergomed’s PrimeVigilance business.
Ashfield PV is a long-established and respected provider in the pharmacovigilance services sector. It was founded as Drug Safety Alliance (DSA) in 2000 and was acquired by UDG in 2012. The company has maintained an excellent reputation as a leader amongst a small field of expert independent specialist pharmacovigilance providers in North America.
The acquisition aligns with Ergomed’s strategy to grow its existing profitable services business both organically and through acquisition and advances a number of important strategic objectives for Ergomed.
- Expanded geographic coverage for PrimeVigilance and enhanced growth.
- Economies of scale and leverage of prior investments.
- Enhanced platform for broader services business.
The acquisition will be funded using the Company’s existing cash resources, without significant detriment to the Company’s ability to fund future potential acquisition opportunities. The Company is expected to continue to generate strong positive cash flow from its contracted order book, which at its interim results in September were reported to be 26.9% up on the prior year, as well as from significant recent new business wins.
Under the terms of the sale and purchase agreement (SPA), Ergomed has acquired the entire issued share capital of Ashfield PV for a total cash consideration of $10 million. The SPA includes customary provisions relating to normalised working capital together with warranties and indemnities to be provided by the Seller in favour of Ergomed, with any claims under these being subject to certain customary financial thresholds and caps, as well as to matters disclosed by the Seller. A transitional services agreement is in place to ensure continuity to Ashfield PV of certain services provided to it by the Seller.
In its financial year ended 30 September 2019, Ashfield PV reported revenue of $11.6 million and adjusted EBITDA of $0.9 million and had net assets of $2.8 million. The order book of contracted future revenues (“backlog”) was $9.8 million.
The acquisition is expected to be accretive to Ergomed’s 2020 earnings per share.