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Home›Price Discovery›Inotiv, Inc. and Envigo Offer to Join Forces to Improve Drug Research and Discovery Solutions

Inotiv, Inc. and Envigo Offer to Join Forces to Improve Drug Research and Discovery Solutions

By Merry Smith
September 21, 2021
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– Expected to establish a leading global supplier of a full range of preclinical solutions –

– Should be immediately accretive to Inotiv profits and margins before synergies –

– Should increase scale, expand customer base and create significant cross-selling opportunities –

WEST LAFAYETTE, Ind. and INDIANAPOLIS, September 21, 2021 (GLOBE NEWSWIRE) – Inotiv, Inc. (NASDAQ:NOTV) (or “Inotiv”), a leading contract research organization (CRO) specializing in non-clinical and analytical drug discovery and development services, and Envigo RMS Holding Corp. (or “Envigo”), one of the world’s leading providers of research models and services, jointly announced today that they have entered into an agreement to Inotiv to buy Envigo. Upon completion of the acquisition, which is subject to customary closing conditions, the combined company will provide drug developers access to products and services for all discovery and non-clinical development within a only organization. Consideration for the transaction consists of $ 200 million in cash and 9,365,173 common shares of Inotiv, subject to certain closing adjustments. Inotiv received committed debt financing to fund the cash portion of the transaction. Based on the closing price of Inotiv common stock on Monday, September 20, 2021, the transaction values ​​Envigo at an enterprise value of approximately $ 545 million and the combined company at an enterprise value of approximately $ 1. , $ 2 billion.

Upon closing of the transaction, Inotiv shareholders are expected to own approximately 64% and Envigo shareholders are expected to own approximately 36% of the combined company on a fully diluted basis.

“The evolving complexity in disease research is creating additional demand for research models, and continued innovation in the biopharmaceutical industry is increasing the demand for specialized and disease-specific models,” said the President and CEO of Inotiv, Robert Leasure, Jr. “The complementary nature of Inotiv and Envigo is expected to accelerate the movement of innovative drugs and medical devices throughout the discovery and preclinical development phases. Backed by deep in-house expertise and scientific capabilities, we are building a comprehensive provider of contracted pharmaceutical research solutions with a full suite of discovery and non-clinical services and research models in one stop, from discovery to solution approval for drug developers.

“Envigo has a long history and extensive expertise in providing essential research models and services to the scientific community,” said Envigo CEO, Adrien hardy. “Our diverse customer base of CRO, pharmaceutical, government and academic institutions, and Inotiv’s biopharmaceutical customers will be able to utilize Envigo’s leading research models and services, including Genetically Modified Models and Services (GEMS), contract selection, Teklad laboratory animal diets, surgical services, personalized antibody services and large and small research models.

Benefits of merger
The expected benefits of the merger are as follows:

  • Create a single, comprehensive provider of drug discovery and non-clinical development services, as well as a leading research model product platform

  • Expand the combined customer base to approximately 3,000 customers in the pharmaceutical, biotech and academic industries with significant cross-selling opportunity

  • Strengthen Inotiv’s operational presence in North America and add multiple sites in Western Europe to strengthen the combined company’s global service delivery

  • Scale up with unaudited pro forma combined revenue of $ 286 million for the nine months ended June 30, 2021

  • Maintains the financial momentum of both companies. Inotiv revenue increased 33% to $ 60 million for the nine months ended June 30, 2021, compared to $ 45 million for the same period in 2020. Envigo revenue increased 22% to $ 141 million in the six months ended June 30, 2021, from $ 115 million in the six months ended June 30, 2020.

  • Create shareholder value with immediate expected benefits and increased margins (before potential synergies)

  • Provides potential cost and revenue synergies through savings in selling and administration costs and cross-selling existing customers on a broader platform of services and products

Additional transaction details

  • The transaction values ​​Envigo at an enterprise value of approximately $ 545 million. For the nine months ended June 30, 2021, Envigo generated unaudited pro forma revenue of approximately $ 212 million.

  • Consideration for the transaction consists of $ 200 million in cash and 9,365,173 common shares of Inotiv, subject to certain closing adjustments. Inotiv received committed debt financing to fund the cash portion of the transaction.

  • The combined company, under the leadership of Robert Leasure, Jr. as President and CEO, expects to retain existing officers and staff at the executive level after the transaction closes.

  • The transaction is expected to close in the fourth calendar quarter of 2021 subject to, among other things, required regulatory approval, certain approvals from Inotiv shareholders to allow the issuance of common shares as part of the transaction, the ‘approval of the merger and merger agreement by Envigo shareholders and other customary closing conditions.

Transaction advisors
Jefferies LLC serves as exclusive financial advisor to Inotiv and Ice Miller LLP serves as legal advisor to Inotiv. Cahill Gordon and Reindel LLP is legal counsel for Envigo.

A current report on Form 8-K containing further details regarding the proposed transaction will be filed by Inotiv and made available on the US Securities and Exchange Commission’s EDGAR website.

Conference call

Inotiv and Envigo will hold a conference call to discuss the business combination on Tuesday, September 21, 2021 at 10 a.m.ET.

To access the conference call by telephone, please dial:

The webcast and accompanying presentation can be viewed on the Company’s website:
https://www.inotivco.com/investors/investor-information/

About Inotiv
Inotiv, Inc. is a leading contract research organization specializing in non-clinical and analytical drug discovery and development services. The Company is focused on developing innovative services supporting its clients’ discovery and development goals for better decision making and faster goal achievement. The Company’s products focus on increasing efficiency, improving data and reducing the cost of bringing new drugs to market. Visit inotivco.com for more information about the Company.

About Envigo
Envigo provides a wide range of standard research models to the pharmaceutical and biotechnology industries, governments, universities and other life science organizations. The company has more than 1,200 dedicated employees in more than 20 locations in North America and Europe.

As a larger organization dedicated solely to providing research models and related products and services, we are committed to helping researchers realize the full potential of their critical R&D projects as we fulfill our mission to work together to build a healthier and safer world. Visit envigo.com for more information about the Company.

This press release may contain forward-looking statements subject to risks and uncertainties, including, but not limited to, the satisfaction of the conditions for the completion of the merger, which may not be met, the risks and uncertainties associated with changes in the market and demand for our products and services, development, marketing and sale of products and services, changes in technology, industry and regulatory standards, timing of acquisitions and successful closing, the integration and the commercial and financial impact of these, the impact of the COVID-19 pandemic on the economy, the demand for our services and products and our operations, including actions taken by government authorities to deal with the pandemic, which may precipitate or exacerbate other risks and / or uncertainties, expansion and related efforts, and various other market and operating risks, including including those detailed in documents filed by the Company with the United States Securities and Exchange Commission.


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