Simulations Plus Inc. on Thursday completed its acquisition of Dilisym Services Inc., a North Carolina software company that makes a program for modeling drug-induced liver damage. Simulations Plus had previously announced its intention to buy the company on May 1.
“This is an exciting step forward for both Simulations Plus and Dilisym Services Inc.,” Simulations Plus Chief Executive Walt Woltosz said in a statement. “Drug-induced liver injury can result in failed clinical trials and in drugs being withdrawn from the market, both of which are a financial disaster to a pharmaceutical company.”
Simulations Plus, based in Lancaster, will pay Dilisym shareholders up to $10 million in cash for the purchase. The firm has made an upfront payment of $5 million - including a $1 million, 18-month holdback for any additional transaction costs - and will pay up to $5 million more over the next three years, depending on Dilisym’s profitability.
Dilisym generated revenues of more than $3 million in 2016, with net earnings of $720,000.
According to the agreement, Dilisym will continue to conduct operations under the same name as a wholly-owned subsidiary of Simulations Plus. Dr. Brett Howell, chief executive officer of Dilisym, will serve as division president. As a result of the transaction, the total number of Simulations Plus employees has increased to 81 from 70.
Shares of Simulations Plus on Thursday gained 75 cents, or more than 6 percent, to close at $12.95 on the Nasdaq.