Laboratory services and products provider Source BioScience (SBS) advances 8% to 15.1p on its latest foray into the M&A market, a move that expands its expertise and could help it win new business.
The £47 million cap has agreed to buy lab services specialist Select Pharma Laboratories in a deal that could be worth up to £7.3 million in cash.
Sterling-based Select adds microbiology, chemistry and physical property testing to Source’s offering. The target’s relationships with large generics manufacturers, distributors and contract manufacturing organisations were also an attraction of the deal.
Following the news analysts at N+1 Singer lifted their forecast three year compound annual growth rate (CAGR) earnings per share to 15.1% from 10.9%. Singer sees scope for further upgrades once the new proposition is rolled out across the group.
The acquisition is to be funded by a £4.4 million undiscounted placing at 14p a share. Source has also arranged £3.5 million of additional borrowings to help foot the bill.
The proposed takeover of Select has helped push Source’s shares more than 40% higher since the end of December.