Clarivate Analytics has agreed to acquire US-based healthcare research and consulting company Decision Resources Group (DRG) from Piramal Enterprises for a purchase price of $950m.

The UK-based analytics firm said that it intends to pay $900m of the purchase price in cash, and issue Clarivate ordinary shares for a value of approximately $50m, one year after the transaction is completed.

As part of the transaction, DRG CEO Vivek Sharma will leave the company, once the transaction is closed and the Clarivate Analytics’s Science Group takes over the business operations.

DRG CEO Vivek Sharma said: “I am excited for this acquisition as it creates an even more powerful platform for DRG’s AI and analytics-enabled solutions to support our customers in their quest to improve patient health outcomes.

“This new and expanded platform will further empower our employees to continue their focus on customer centricity and collaborative innovation with our customers.”

Combined capabilities of Clarivate and DRG to enhance revenue growth

The transaction is expected to combine DRG’s technologies data and expertise with Clarivate, ensuring its customers make evidence-based decisions and facilitating clinical and commercial success for the company.

Combined capabilities of Clarivate and DRG would pave ways for revenue growth through new product development and enhanced market penetration. The transaction would strengthen the position of the combined organization in drug, device and medical technology areas.

Clarivate said that it has secured a $900m committed bridge facility from Citi and Goldman Sachs, and it intends to receive long-term financing with proceeds from debt and equity capital markets to close the transaction.

The closing of the transaction is subject to the fulfilment of customary closing conditions and regulatory approvals, including approval by PEL’s shareholders, and is expected in the first quarter of 2020.

Clarivate Analytics executive chairman and CEO Jerre Stead said: “This is a milestone acquisition which doubles the size of our Life Sciences business, is accretive to our 2020 earnings, and sets us up to become an essential, end-to-end, industry-leading data and analytics provider to the highly attractive Life Sciences ecosystem.

“We expect the acquisition of DRG to increase Clarivate’s total company revenue by 20%, deliver approximately $77 million in annual Adjusted EBITDA before the pursuit of any revenue synergies, and drive DRG’s Adjusted EBITDA margins towards Clarivate’s total company target of greater than 40%.”