Pays Galapagos €12.5m for US-based Compound Focus
Evotec has acquired Compound Focus, the compound management business of BioFocus, a Galapagos company, for €12.5m.
Evotec of Germany said the transaction would substantially augment its early drug discovery, provide critical mass to its existing compound management offering, and add profitable revenues.
Compound Focus, based in South San Francisco, US, offers small molecule compound management services. The company's technologies are focused on automated storage and custom design solutions for small molecule drugs. Customers include US federal institutes and pharma companies such as Elan, Lundbeck, Sepracor and Procter & Gamble. In 2010, Compound Focus had revenues of €7.8m with an operating profit of €2.6m.
Evotec will pay Belgium-based Galapagos an immediate cash payment of €10.25m and an additional €2.25m in potential earn out payments upon performance of the business in 2012/2013 depending on revenues and certain corporate milestones.
Dr Werner Lanthaler, chief executive of Evotec, said: ‘This acquisition will substantially improve our ability to support our alliance partners in developing and managing their compound libraries. The link to our industry leading screening platform further strengthens our hit identification capabilities. In addition, the profitable revenues shown by Compound Focus over the last years will further enhance our earnings profile going forward.’
Onno van de Stolpe, chief executive of Galapagos, added: ‘Today's transaction enables us to concentrate on what we do best in BioFocus and Argenta, providing top class drug discovery solutions needed to deliver molecules for our customers. Compound management is not strategic to our offering. We are pleased to have found a good home for Compound Focus and wish them continued success as part of Evotec.’