Resonance Health to acquire TrialsWest in $8m deal, expands global clinical trial reach
Perth-based Resonance Health (ASX: RHT) has secured a deal to acquire private clinical trial site and research centre TrialsWest, representing a major step forward in its growth strategy.
TrialsWest is one of Australia’s most experienced clinical research centres, partnering with some of the world’s leading pharmaceutical and biotechnology companies to help bring new medicines and vaccines to the global community.
It is expected to contribute $2 million in revenue and $670,000 in earnings before interest, taxation, depreciation and amortisation (EBITDA) on an annualised basis to Resonance Health’s bottom line.
Terms of the acquisition
Under the terms of the acquisition, Resonance will pay TrialsWest an upfront consideration of $4m, calculated on a cash-free, debt-free basis.
A further $4m may be payable to TrialsWest pursuant to an earn-out arrangement and subject to EBITDA performance targets being achieved during the financial years 2024 to 2026.
Total consideration of up to $8m will be payable if TrialsWest generates annual EBITDA of $1.33m in the financial period up to and including 2026.
The consideration is expected to be funded from Resonance’s cash reserves and a new debt facility.
Following the completion of the transaction by mid-year, TrialsWest founder Dr Helen Pavitt will take on the role of vice president (clinical trials).
Co-founders Michelle Davies and Professor Peter Bremner will remain in key leadership roles at TrialsWest for the next three years.
Key Pillar
The TrialsWest acquisition is believed to be a key pillar in Resonance Health’s strategy of increased focus and commercial involvement in the clinical trial ecosystem, utilising its deep-domain expertise to deliver value for customers worldwide.
It is expected to result in year-on-year revenue growth and form the basis of organic and acquisitive growth in future profits.
Chief executive officer Andrew Harrison said the company was keen to welcome TrialsWest into the Resonance family.
“The TrialsWest founders have built a truly great business and the company’s contributions to Resonance Health will be highly valued with respect to work already underway and regarding future clinical trial work for our expanding base of global pharmaceutical customers,” he said.
Mr Harrison added that the company planned to expand TrialsWest with the addition of new clinical trial sites and would continue working on complementary acquisitions.