Instem, AIM-listed provider of software to the pharmaceutical sector, has made a bolt-on acquisition that takes it into the early phase clinical market. It has acquired Logos Technologies for an initial cash consideration of £0.55m plus an earn-out of up to £4.45m in a mixture of cash and shares should challenging profit targets be met over the next four years.
Headquartered in London, Logos provides e-source data capture and site automation software for early phase clinical studies. It turned over £0.75m in FY12, an increase of 114% over the prior year, recording an EBITDA of £65k and is expected to be earnings enhancing in its first full year of ownership. Clients include SNBL CPC, PharmaMedica Research and Spaulding Clinical.
Logos is a strategic purchase for Instem. It extends Instem’s addressable market beyond its core ‘pre-clinical’ market into the ‘early phase’ clinical trial market, which is less automated and therefore an area of opportunity. Having a broader product portfolio should also enable Instem to bid for larger deals that span both areas of the market. Another positive is the lack of overlap between the two companies’ client bases, creating cross-sale opportunities. All in all, Logos a sensible bolt-on purchase – let’s hope it provides the fillip that Instem’s recent lacklustre financial performance requires (see Instem fails to grow in FY12).