Simulations Plus (SLP) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of Pro-ficiency for $100 million expands presence across the drug development value chain, integrating simulation, AI, and medical communications capabilities.

• Doubles total addressable market to $8 billion by adding $4 billion in clinical simulations, training, analytics, and medical communications to existing biosimulation offerings.

• Broadens and differentiates offerings to include clinical trial operations, medical affairs, and communications for life sciences customers.

• Provides significant cross-selling opportunities by leveraging established relationships with top pharma companies and expanding into new markets.

• Enhances leadership team and internal expertise, with Pro-ficiency’s CEO joining as president of a new business unit and supporting continued M&A strategy.

Financial terms and conditions

• Pro-ficiency acquired for approximately $100 million, paid entirely in cash from existing cash and investment resources.

• The transaction leaves the company well-capitalized with no debt.

• Pro-ficiency generated $15 million in revenue in 2023, with anticipated contribution of $15–$18 million in fiscal 2025.

• Transaction expected to be accretive to fiscal 2025 EPS.

• Updated fiscal 2024 guidance: total revenue $69–$72 million, diluted EPS $0.54–$0.56.

Synergies and expected cost savings

• Integration enables cross-selling to a combined customer base of over 300 clients, accelerating go-to-market strategies.

• Highly complementary and synergistic software and services, leveraging AI technologies to enhance clinical trial and launch training, data analytics, and outcomes.

• Combined offerings expected to deliver cost efficiencies, faster clinical trial cycles, and improved market adoption.

• Software margins for Pro-ficiency are slightly lower but expected to improve with scale and AI-driven efficiencies.

• Opportunity to align revenue mix with Simulations Plus' traditional balance of software and services.