Encorium Group Inc., the company designing and running clinical trials and patient disease registries for the pharmaceutical, biotechnology and medical device industries, announced on June 11 the merger of the British Virgin Islands-registered Fine Success Investments Ltd. into Encorium. It was said that Fine Success Investments (BVI) will add $11 million in annual net revenue to Encorium on a pro forma basis.
The merger transaction is now subject to the completion of due diligence and approval by both parties' Board of Directors, and the signing of a definitive agreement. The deal is expected to close in the third quarter of 2008.
By the time of the planned merger, the BVI company which does business as Linkcon, will acquire clinical research organisations in India, Latin America and China. In its turn, Encorium has signed a letter of intent to purchase an oncology-focused clinical research organization – Prologue Research International Inc. - for $13 mln, of which $4.5 mln will be paid in cash. In order to do so, Encorium plans to take out a $5 mln loan from Chardan Capital.
Linkcon investors will receive 12.5 mln shares of Encorium stock, and after the merger Linkcon expects to purchase additional 10 mln shares of the Encorium. So, Linkcon and its shareholders will get 22.5 mln shares and Encorium shareholders will stay with about 23.6 million shares.
The company formed as a result of the merger of the BVI-incorporated Fine Success with Encorium Group Inc. is expected to have annual revenue of about $50 mln to $55 mln.
