(Source: PRNewswire)
WAYNE, Pa., July 1 /PRNewswire-FirstCall/ -- Encorium Group, Inc. (Nasdaq: ENCO), a full service multinational contract research organization (CRO) that provides design, development, and management capabilities for clinical trials and patient registries to many of the world's leading pharmaceutical companies, today provided an update to the expected timeframe surrounding its previously announced letter of intent with Pierrel SpA, an international contract research organization listed on Milano's Stock Exchange, for the sale of its U.S. business. The sale, which was originally expected to close on June 30, 2009, is now anticipated to close by July 15, 2009.
According to the most recently amended letter of intent, Pierrel has the right to purchase the Company's U.S. Line of Business for a purchase price equal 17% of the Company's U.S. backlog at closing, less the amount that assumed current liabilities exceed acquired current assets by more than $500,000. The Company anticipates that backlog at closing will be approximately $10.7 million. It is estimated that at closing, the liabilities assumed by Pierrel will exceed the assets transferred by the Company by more than the $500,000 deficiency allowance. As a result, the Company does not anticipate it will receive cash from Pierrel at closing.
The Company is proceeding with negotiations and diligence with respect to the sale of the Company's wholly owned subsidiary Encorium OY to a leading full-service clinical research organization based in the United States and with operations globally, as announced on May 11, 2009. The Company anticipates that the closing of this transaction will occur in the fourth quarter of 2009. Terms of the agreement with respect to the sale of Encorium OY remain confidential and the closing is subject to the completion of due diligence, execution of a definitive agreement, and the fulfillment of certain closing conditions, including stockholder approval. Based on the facts known to the Company at present, it is anticipated that any distributions to stockholders in connection with the transactions will be significantly less than the current stock price.
About Encorium Group, Inc.
Encorium Group, Inc. is a global clinical research organization specializing in the design and management of complex clinical trials and Patient Registries for the pharmaceutical, biotechnology and medical device industries. The Company's mission is to provide its clients with high quality, full-service support for their biopharmaceutical and medical device development programs. Encorium offers therapeutic expertise, experienced team management and advanced technologies.
