Resonance acquires TrialsWest

Resonance Health has acquired TrialsWest in a consideration package worth up to $8 million.

The healthcare tech and services company told the market it had agreed to terms with TrialsWest, which is one of Australia’s seasoned clinical trial and research centre entities.

The transaction between both parties is expected to be finalised in the final quarter of the 2024 financial year.

Under the share sale agreement, Resonance will pay an upfront cash consideration payment of $4 million – a figure which is TrialsWest’s predicted earnings before interest, tax, depreciation and amortization for the 2024 financial year, multiplied by six.

Resonance added that this amount was calculated on a debt and cash-free basis. 

A total consideration package of $8 million will be reached, should TrialsWest’s annual EBITDA reach $1.33 million or higher from now until the 2026 financial year.

“We are delighted to be welcoming TrialsWest into the Resonance Health family,” Resonance’s chief executive officer Andrew Harrison said.

“TrialsWest has built a truly great business and its contributions to the Resonance Health will be highly valued, both with respect to work already underway and for future clinical trial work for our expanding base of global pharmaceutical customers.”

Despite the acquisition, three of TrialsWest’s founders – Dr Helen Pavitt, Professor Peter Bremner and Michelle Davies – will maintain leadership roles with the company for a minimum three-year period.

Dr Pavitt, who will assume vice presidency of the clinical trials business, said the agreement provided a great growth platform.

Resonance said securing TrialsWest would not only enhance its ability to generate value on a global scale for its customers, but also potentially grow revenue and profit annually.

The company appears to be following in the footsteps of Nedlands-based Linear Clinical Research – an extension entity of the Harry Perkins Institute of Medical Research – which has enjoyed sustained success servicing the US pharmaceutical and biotechnology industries since its establishment in 2010.

In August last year, Resonance won a $6.33 million contract with Sun Pharmaceutical, an India-headquartered company, where it provided imaging services and laboratory analysis.

Resonance closed trade at 7.6 cents per share, up 9 per cent.