Think Research has reached a deal to acquire fellow Toronto-based health company BioPharma Services for a total of about $44.6 million in cash and equity, plus an annual earnout.
BioPharma Services is a contract research organization (CRO) focused on early-stage clinical research. Think Research has entered into a definitive share purchase agreement to buy all issued and outstanding shares of BioPharma. Think Research intends to finance part of the cash component of the deal, which is expected to close in fiscal Q3 2021, through a private placement.
Think Research said the acquisition would establish it as “a digital leader in the CRO industry.”
Think Research said the acquisition of BioPharma would establish the company as “a digital leader in the CRO industry.” The company also sees “high growth potential” in expanding BioPharma’s capabilities and products from Phase 1 clinical trials, where its current focus is, to Phase II to IV clinical trials.
“The COVID-19 pandemic has clearly demonstrated the urgent need for CROs to digitize and apply technology to the work they carry out for their pharmaceutical clients,” said Sachin Aggarwal, CEO of Think Research, who described the two companies as “highly complimentary.”
Founded in 2006, Think Research is an acquisitive healthcare software firm that develops tools and content for clinicians. The company currently trades on the TSX Venture Exchange under the symbol ‘THNK.’ Think Research recently increased its credit facility to pursue more acquisitions and saw record revenue in Q1 2021, which it attributed to its acquisitions of MDBriefCase and Clinic 360.
BioPharma specializes in clinical trials, bioequivalence studies, and bioanalysis, and serves pharmaceutical, medical device, and biotechnology companies across the globe. The company, which has facilities in Canada and the United States (US) and teams in Canada, the US, and Europe, conducts about 100 studies per year.
According to Think Research, BioPharma has a “diversified and highly reoccurring revenue stream,” which it attributes to its 100-plus blue-chip customers and global operations. Together, Think Research said the two companies would reach over 300,000 healthcare professionals, 2,800 hospitals, clinics, and long-term care facilities, and 200 research and pharmaceutical companies.
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The BioPharma acquisition would also expand Think Research’s US presence. In total, Think Research expects the transaction to nearly double the company’s pro forma 2021 revenue to $82 million.
Following the close of the deal, Think Research plans to accelerate the digitization of BioPharma’s core clinical business, adding that it expects to achieve cost savings through the use of Think Research’s existing SaaS products, which include electronic data capture, digital referral software for trial recruitment, learning management software for trial participants, and telemedicine software for conducting remote trials.
“Our ability to digitize BioPharma’s services will improve the offering for clients and create new SaaS revenue streams further setting us apart from our digital health peers,” said Aggarwal.
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“Our research and pharmaceutical clients are hungry for technology solutions that not only drive faster, more accurate results but ultimately get new research where it is meant to be – at the patient point of care,” said Renzo DiCarlo, CEO of BioPharma. “By combining these companies, we see immense potential for change in our industry that will drive revenue and improve healthcare.”
The acquisition remains subject to regulatory approval. It is also conditional on Think Research having secured sufficient financing to complete the deal. To support the cash component of the purchase price, Think Research aims to raise between $12 million and $15 million, including a $5 million anchor investment from NorthWest Value Partners, a private investment firm founded by Paul Dalla Lana, chairman and CEO of NorthWest Healthcare Properties REIT. Think Research plans to finance the remaining cash consideration via debt financing.
Think Research is set to acquire BioPharma on a debt-free, cash-free basis, but holds the option to assume the existing indebtedness of BioPharma. The company intends to retain key members of BioPharma’s team, including its CEO, executive VP of business development, and other executives.
Feature image from Unsplash
