Warnex Analytical Services has concluded the acquisition of the MDS Pharma Services pharmaceutics business located in Blainville, Quebec, following an agreement in principle announced on 18 July 2006
The purchase price of $1,950,112.23 was paid in cash.
Concurrent to the acquisition, Warnex signed a 12-month lease for the Blainville facilities, with an option to renew for six months.
The acquisition will operate as Neopharm Laboratories, a division of Warnex Analytical Services.
Warnex expects to bring the Blainville pharmaceutics operations, which reported $6.7 million in annual revenue and incurred a loss in its last fiscal year, in line with the historically profitable performance of its existing analytical business unit.
The acquisition, which effectively doubles the company's analytical revenue, is expected to be Ebitda positive within 12 months.
"This acquisition, for a number of reasons, made sound, strategic rationale.
"First, we are already well established in this business segment and this acquisition gave us a one time opportunity to leverage our success into a dominant market position in our regional market of Quebec," said Mark Busgang, president and CEO of Warnex.
"As well, this acquisition gives us the scale to reach beyond our regional market and we will now focus on more aggressive international growth".
MDS Pharma Services's analytical laboratories offer pharmaceutical analysis, traditional chemistry, microbiology, method development and validation, technology transfer, and stability studies.
The Blainville operations occupy 28,000 square feet and are fully cGMP compliant.
The MDS Pharma Services Bioanalytical Services unit continues its operations at the Blainville site.
