Evotec completes Aptuit acquisition

This acquisition adds considerable business opportunities to further accelerate Evotec's long-term strategy to be the industry partner of choice for external innovation.

Evotec paid a total consideration of approx. $ 300 m (approx. EUR 256 m; EUR/$ fx rate of 1.17) in cash for the acquisition of Aptuit from Welsh, Carson, Anderson & Stowe ("WCAS"), a leading private equity firm. The acquisition of 100% of the issued and outstanding equity interests of Aptuit is financed through a mix of existing cash reserves and an additional new EUR 140 m senior debt facility.

Aptuit, a partner research organisation for integrated outsourced drug discovery and development solutions, provides a complete set of integrated early discovery to mid-phase drug development services, including INDiGO(R), an integrated and highly efficient process to IND submission, complemented by high-end integrated CMC.

Aptuit has approx. 750 employees, mainly scientists, working across three state-of-the-art discovery, development and manufacturing facilities in Europe in Verona, Italy; Basel, Switzerland; and Oxford, United Kingdom. Completing more than 1,000 projects in 2016 (for over 400 customers), Aptuit has a very strong network in small, medium and large Biopharma and a high level of repeat business.

Aptuit will continue to operate and serve its loyal client base in all currently existing segments under its current set-up. Employees and capabilities will be integrated into Evotec's global drug discovery group, thereby creating the premier drug discovery and development innovation partner leveraging both companies' extensive partner networks, platforms and maximising commercial synergies.

Guidance updated for Evotec Group including Aptuit

With the closing of the transaction, Evotec updates its financial targets for the year 2017.

Total Group revenues are expected to increase by more than 40% compared to 2016 (2016: EUR 164.5 m),

Adjusted Group EBITDA is expected to improve by more than 50% compared to 2016 (2016: EUR 36.2 m), and

Group R&D expenses are expected to be approx. EUR 20 m.

This guidance update implies that the Aptuit business will be accretive to Evotec's 2017 revenues and adjusted EBITDA and is calculated on a EUR/$ fx rate of 1.18.

Dr Werner Lanthaler, Chief Executive Officer of Evotec, commented: "The acquisition is a significant step forward in our vision to lead services for external innovation and to build a co-owned pipeline. This business combination strengthens Evotec's position to lead the megatrend of external innovation. We warmly welcome the Aptuit employees to the Evotec Group and look forward to working with them."

Dr Mario Polywka, Chief Operating Officer of Evotec, added: "We are pleased the acquisition has closed so quickly and we can now approach the exciting phase of welcoming the Aptuit employees and delivering our expanded offering to all our clients.

"Through this transaction, Evotec transforms itself from the premier innovation-led drug discovery company, delivering historically along the value chain and stopping at the PDC, the pre-clinical development candidate, to the premier drug discovery and development company delivering an end-to-end set of capabilities under one roof to seamlessly move into the clinic and beyond. Together with Aptuit, we will build global centres of excellence for external innovation for our partners and customers."

Aptuit's advisors to the transaction included: Cravath, PWC, Cain Brothers and William Blair. Evotec's advisors to the transaction included: Freshfields Bruckhaus Deringer, KPMG, Mercer and Rothschild.