Dublin-listed pharma services company Open Orphan said on Monday it has agreed to merge with UK-based Hvivo in a £30 million (€35.7m) tie-up that classifies it as a reverse takeover.
The deal values Hvivo, a clinical trial business that can accelerate drug and vaccine development, at £12.96 million. Shareholders in Hvivo will own 44.7 per cent of the combined stock of the enlarged company when completed, subject to approval from Open Orphan shareholders.
"The merger of Open Orphan and Hvivo is a key milestone in the execution of our strategy to become a larger-scale specialist pharma services business and in complementary segments where specialist skills and know-how command higher margins," said Open Orphan chief executive Cathal Friel, who will become the group's executive chairman once the merger is completed.
Trevor Phillips, current executive chairman of Hvivo, will become the group chief executive.
Open Orphan is the result of Mr Friel reversing his pharma services business of the same name into Dublin-listed drug clinical trials manager Venn Life Sciences earlier this year. Mr Friel said from the outset that he would use the group as a platform for a series of follow-on deals before putting itself up for sale in two to three years' time.
Open Orphan plans to raise £10 million from a share-placing early next year in a transaction that is partly underwritten by Mr Friel’s Raglan Capital.
“The Hvivo board believes this transaction offers our shareholders the opportunity to participate in a larger business with greater growth potential, diversified risk and a competitive market position,” said Mr Phillips.
“Together we share a similar vision for the future of European [clinical research organisations] and an entrepreneurial approach to developing further the enlarged group through a focus on operational efficiency, organic growth and targeted acquisitions to expand geographic and service capabilities.”