Ergomed expands its US footprint in earnings enhancing deal worth up to US$25mln

Ergomed PLC (LON:ERGO) said it has acquired MedSource, a US-based specialist oncology and rare disease contract research specialist, in a deal worth up to US$25mln.

The transaction, which sees the UK group expand its presence in the strategically important US market, will be immediately earnings enhancing.

Practically, it adds 20 new clients and a US$41mln order book.

MedSource’s revenues last year were US$19.3mln, while its underlying earnings (EBITDA) were US$1.3mln.

The company is paying an immediate US$16.2mln in cash and US$1.8mln in paper, followed by up to US$7mln (payable 90% in cash) dependent on 2021 results.

Ergomed chairman, Dr Miroslav Reljanović said the addition of MedSource builds on the successful acquisition and integration of Ashfield Pharmacovigilance, now PrimeVigilance USA, earlier this year.

“We look forward to developing the potential of this new business to offer truly global clinical research services to our international customer base,” he added in a statement.

“We are excited to welcome the MedSource team to Ergomed and are eager to work alongside our new colleagues to leverage our combined expertise in complex therapeutic areas for the benefit of our clients and patients worldwide.

“Looking ahead to 2021 we expect to see continued momentum across the business as we look to increase our footprint in key geographies, and firmly establish Ergomed as a leading global provider of specialist services to the pharmaceutical industry.”