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Ergomed - Earnings accretive deal

February 2020

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Ergomed has acquired Ashfield Pharmacovigilance, a North Carolina-based pharmacovigilance services provider, from UDG Healthcare. The business expands Ergomed's PrimeVigilance footprint and establishes a platform for the broader Ergomed CRO business in the US. It will add 40 new clients to PrimeVigilance and gives the division critical mass of 90 in the US.Ergomed has paid US$10m cash for the business - 0.86x sales and 11x ebitda. It comes with a strong order book of contracted future revenues of US$9.8m. The deal is eps enhancing from day one and forecasts a rise to 18.2p this year (4% accretion) and 20.1p next. Buy. ...

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