hVIVO (HVO) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of two German clinical research units (CRS) expands service offering from Phase I to Phase II, enabling broader end-to-end clinical development services and in-patient trials across more therapeutic areas.

• CRS brings expertise in specialized patient trials, especially renal and hepatic impairment, and a strong European client base, complementing the acquirer's U.S.-focused clientele.

• Diversifies revenue streams and client base, including access to four of the world's top 10 biopharma companies.

• The deal aligns with a strategy to acquire adjacent services, leveraging existing infrastructure and systems for growth, and supports the goal of £100 million revenue by 2028.

• CRS's multi-site capabilities and established relationships with big pharma enhance international reach and cross-selling opportunities.

Financial terms and conditions

• Acquisition price is €10 million in cash, fully funded from existing cash resources, less than 50% of CRS's annual revenue.

• CRS delivered €19.9 million in revenue in 2024 and €18.6 million in 2023, with adjusted EBITDA losses of €1.8 million and €1.6 million, respectively; similar performance expected in 2025.

• Restructuring and transaction costs are estimated at €2.5 million in 2025, including net liabilities of less than €0.5 million.

• The business is expected to become earnings accretive by 2026, with margins improving as synergies are realized.

Synergies and expected cost savings

• Immediate cost savings by internalizing biometric, medical writing, laboratory, and PK analysis services previously outsourced by CRS.

• Operational efficiencies expected through improved scheduling, project management, and leveraging existing recruitment and CRM systems.

• Cross-selling opportunities anticipated across the group, with increased average contract sizes and a stronger sales pipeline.

• Enhanced financial reporting and KPI-driven management to identify further efficiencies.