Pharma services group Ergomed secures £30m credit facility from HSBC to support acquisitions
HSBC has provided £30 million of super senior debt to support London-listed pharma services company Ergomed in the continuation of its acquisition drive, according to sources. The £15 million multi-currency growth RCF and £15 million accordion facility means the group is 2.4x levered with no junior debt.
Ergomed has recently set up a clinical trial with a hospital at the center of the outbreak in Bergamo, Italy. The group is trialing an antibody in the treatment of patients with serious respiratory conditions caused by Covid-19, according to CEO Dr Miroslav Reljanovic.
“To date we have not seen a material impact on the business,” the company said about the virus in its earnings.
“Plans for financial risk mitigation are in place and will be implemented should this become necessary. The group has a strong balance sheet and a £30 million credit facility and is a resilient business in the face of the risks posed by COVID-19.”
Deloitte advised on the facility which will support future bolt-on acquisitions this year in the UK and abroad to support growth. Over the last financial year Ergomed’s EBITDA multiplied more than fivefold. It reported LTM EBITDA of £12.5 million for the 12 months to December 2019, from £2.3 million in 2018.
Ergomed comprises a clinical trial division, a pharmacovigilance division (providing medical and regulatory information services) and an orphan drug division (focusing on developing drugs to treat rare diseases).
The company plans to focus on pharmacovigilance operations and recently completed the £10 million acquisition of bolt-on U.S. pharmacovigilance provider Ashfield, the company said in its earnings report.
The global pharmacovigilance market is expected to grow to more than $8.9 billion in 2024 from $4.3 billion in 2018, according to Global Market Insights.
Ergomed has made a series of acquisitions since its IPO in 2014 including UK-based pharmacovigilance providers Harefield Ltd and Pharmacovigilance Services.
Temple Bright is the company’s lawyer on the new financing alongside Deloitte.
This article appeared on the Reorg website on 31 March 2020.