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Ergomed PSR acquisition seen as a “good fit”

Numis rates Ergomed a 'buy' with a 280p target price
deal, business men handshake
Ergomed agreed to acquire PSR Group in September

Numis analyst Stefan Hamill says Ergomed PLC’s (LON:ERGO) new acquisition is a “good fit” as the broker upgraded its target price to 280p and repeated  its ‘buy’ recommendation.

In late September, Ergomed announced a €5.7mln deal to acquire Dutch-based PSR Group BV, a niche contract research organisation specialising (CRO) in orphan drug development. Alongside the deal it launched a placing to raise £2.9mln, before expenses.

READ: Ergomed unveils €5.7mln acquisition of Dutch-based PSR Group, part-funded by £2.9mln placing

“Ergomed's acquisition of PSR is a good fit with its existing CRO business, adding an orphan drug-focused CRO that strengthens its capabilities and critical mass in this attractive market niche, as well as its first Benelux-based office in Amsterdam, expanding its geographic footprint in a city that is a front runner to become the future home of the EMA post-Brexit,” Hamill said.

The analyst added: “We upgrade our revenues c.10% over our forecasts, as detailed in the following pages, with EBITDA rising c.6% and EPS rising c.1-2% on the higher share count.”

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