(By Balaseshan) ICON Plc (NASDAQ: ICLR), a provider of outsourced development services, has agreed to buy the clinical trial services business of Cross Country Healthcare Inc. (NASDAQ: CCRN) to enhance its presence in pharmacovigilance and drug safety consulting.
ICON is buying the clinical trial services business for a cash consideration of $52 million, plus an earn-out of up to $3.75 million related to certain performance-based milestones.
Cross Country Healthcare said it intends to use a portion of the net proceeds from this transaction to retire all of its outstanding bank debt. Cross Country said it decided to divest the business as a result of an extensive review of its operations and the changing landscape in the pharmaceutical research and development outsourcing industry.
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"Selling this business is a logical step as we narrow our focus and concentrate our resources on our core nurse and allied staffing and our physician staffing businesses, which pro forma would represent about 90% of our consolidated revenue," said Joseph Boshart, Chief Executive of Cross Country.
Cross Country's Clinical Trial Services Division includes ClinForce and Assent Consulting, whose services include contract staffing, permanent placement and functional service provision. The division also includes AKOS, a U.S. and European Union provider of pharmacovigilance and drug safety services.
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ClinForce and Assent will be combined with ICON's FSP division, DOCS, creating a leader in global resourcing and FSP, while AKOS will enhance the services offered by ICON's medical and safety services team. The transaction is expected to close within the next 30 days.
"The ClinForce and Assent businesses will significantly expand our resourcing and FSP capabilities in the US and, when combined with DOCS strong European footprint and growing emerging markets presence, gives us the ability to deliver truly global resourcing solutions. Additionally, AKOS enhances our expertise in the areas of pharmacovigilance and drug safety consulting, which are increasingly important capabilities required by our clients," said Ciaran Murray, CEO at ICON.
ICLR closed Friday's regular session down 0.03% at $29.30, while CCRN ended down 0.88% at $5.60.