Simulations Plus (SLP) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of Pro-ficiency for $100 million expands presence across the drug development value chain, integrating simulation, AI, and medical communications capabilities.

• Doubles total addressable market to $8 billion by adding $4 billion in clinical simulations, training, analytics, and medical communications.

• Broadens and differentiates offerings to include clinical trial operations, medical affairs, and commercialization for life sciences customers.

• Provides significant cross-selling opportunities to a shared life sciences customer base, leveraging established relationships with top pharma companies.

• Strengthens leadership team and internal expertise, with Pro-ficiency’s CEO joining as president of a new business unit and supporting continued M&A strategy.

Financial terms and conditions

• Purchase price of approximately $100 million, paid entirely in cash from existing cash and investment resources.

• Pro-ficiency generated $15 million in revenue in 2023; expected to contribute $15–$18 million in fiscal 2025.

• Transaction expected to be accretive to fiscal 2025 EPS.

• Updated fiscal 2024 guidance: total revenue $69–$72 million, diluted EPS $0.54–$0.56.

• Acquisition valued at roughly 7x revenue, with positive EBITDA contribution and no debt post-transaction.

Synergies and expected cost savings

• Cross-selling Pro-ficiency’s products to over 300 existing customers, leveraging existing MSAs to accelerate go-to-market and contract closure.

• Software margins expected to improve as scale and AI technologies are leveraged.

• Combined offerings deliver cost efficiencies, faster clinical trial cycles, and deeper client engagement.

• Opportunity to align revenue mix with Simulations Plus' traditional balance of software and services.

• Enhanced ability to drive innovation and improve client engagement through advanced analytics and AI.