Deal for clinical trial computer software company is off... and on again
Date of publication: July 27, 2010
Oracle Health Sciences has acquired clinical trial computer software and data management solution company Phase Forward in a deal worth $17.00 a share in cash. This a 30 percent premium over the closing share price of $13.08 and represents a deal value of approximately $685 million. See this illustrated on our 2010 M&A Scorecard
Phase Forward's software solutions enable pharmaceutical companies to manage clinical trials and focus on cost reduction and therefore boost profitability. This is critical at a time when drug companies are looking to offset revenue declines as profitable brand name drugs face competition from the ever increasing generics industry.
The strategy for Oracles decision to acquire Phase Forward shows great financial acumen and is based on buying makers of industry-specific software who have loyal existing customer base and then cross-selling its other key products.
Phase Forward can boast a strong client list, including, AstraZeneca, GlaxoSmithKline and Merck and Co, and has signed a number of new agreements in 2009 for its clinical trial software solutions.
Oracle's decision to acquire Phase Forward comes after Phase Forward has also been proactive with regard to expanding its global market presence. It has recently purchased Maaguzi, the provider of web based Electronic Patient Reported Outcomes, for $11 million in cash in July 2009 and Weblam Software, a provider of platform solutions supporting clinical data analysis for $14 million in cash in April 2009.
The recent acquisition of Phase Forward will provide Oracle with a strong platform to take full advantage of the changing finacial priorties within the pharmaceutical industry. They may also compound these deals with further acquistions if additional companies present themselves and can meet Oracles rigourous selection criteria.
Tim Martin
July 2010