2i’s Deal of the Week: BioClinica Acquires eTrials Worldwide

Along with tracking stocks by functional category (i.e. applications, content/media, merchandising), we’re in the process of selecting companies to track by vertical. Regular readers of 2i will know that we pay particular attention to the eHealth, eGov, and eLearning industries. One eHealth company we will be tracking is BioClinica, which announced on May 5 that it signed an agreement to acquire eTrials Worldwide, Inc.

We like BioClinica (for our purposes of valuation analysis and industry trends, not for investment purposes) because it’s an active buyer of ehealth companies, which is one of the industries with continued M&A activity.  The BioClinica – eTrials deal is also interesting because eTrials is suing some of its former senior executives and Unithink, the firm they joined subsequent to their employment at eTrials, for IP related issues. We’ll be tracking the progress of the law suit and any ramifications it may have on BioClinica’s valuation.

Bioclinica is one of the largest providers of central core imaging and eClinical solutions, with a global customer and partner base across pharmaceutical, biotechnology, medical device and contract research organizations. BioClinica is the operating name of Bio-Imaging Technologies, Inc. (NASDAQ: BITI).

Bio-Imaging bought Phoenix Data Systems, Inc. in March 2008 for $23.95M (specifically, $5.92M in cash, $13.44M stock, $3.4M in earnout, and $1.2M in assumed liabilities, according to Capital IQ). At closing, the valuation ratios of this deal were 1.8x TEV/LTM Revenue and 15.4x TEV/LTM EBITDA.

Bio-Imaging’s offer of $10M in cash and stock represents a 27% premium to the average closing price for the past thirty days. The deal is expected to close in June.  As the time of the announcement Bio-Imagings tender offer for eTrials gave the firm valuation metrics of 0.4x TEV/LTM Revenue. (According to its Q1-2009 10-Q filing, eTrials had a net loss $964,178, so the TEV/LTM EBITDA ratio is inapplicable).

Bio-Imaging is the third largest electronic data capture provider in the bio-pharma space behind Phase Forward Inc. (NASDAD: PFWD), of Waltham, Mass., and Medidata Solutions Inc., of New York. Medidata filed an S-1 Statement on January 26, 2009, so the shares are not yet public, but we’ll track the stock performance once it IPO’s.

YoY Stock Price of BITI v. PFWD

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Filed Under Deal of the Week, Merger & Acquisitions