11:28 AM EDT, 06/13/2024 (MT Newswires) -- Healwell AI (AIDX.TO) on Thursday said it agreed to buy BioPharma Services, a full-service contract research organization specializing in early clinical trials, for $11.9 million from Think Research to expand its clinical-research capabilities.

The deal consideration is in addition to a performance earnout of up to $2.5 million.

The transaction is expected to be highly accretive for the healthcare-technology company. BioPharma is expected to generate $35 million to $40 million in revenue in 2024 with about 5% EBITDA operating margins based on year-to-date performance.

"We are thrilled to announce the acquisition of BioPharma, one of the largest Canadian owned and operated CROs, a strategic move aimed to enhance HEALWELL's own clinical research capabilities and bring new AI-driven advancement to the pharmaceutical industry," chief executive Alexander Dobranowski said in a release.

HEALWELL will pay $3.9 million in cash at closing; $2.5 million via the issuance of a promissory note at closing, secured against the shares of BioPharma and maturing on the first anniversary of the closing; about $4.2 million to be paid by way of the issuance of Class A subordinate voting shares; about $1.3 million in value of subordinate voting shares to be issued on closing; and up to $2.5 million to be paid as an earn-out over the three years following the closing.

The company's shares were last seen down $0.19 to $2.85 on the Toronto Stock Exchange.

Price: 2.86, Change: -0.18, Percent Change: -5.92