TMCnet News
Simulations Plus Provides Additional Details Regarding Cognigen AcquisitionLANCASTER, Calif. --(Business Wire)-- Simulations Plus, Inc. (NASDAQ: SLP), a leading provider of simulation and modeling software for pharmaceutical discovery and development, today provided additional details regarding its Agreement and Plan of Merger (the "Agreement") with Cognigen Corporation ("Cognigen") of Buffalo, New York, announced yesterday. Walt Woltosz, chairman and chief executive officer of Simulations Plus, Inc., said: "The excitement around this announcement has generated a number of questions on the part of our shareholders. In order to provide a level playing field for everyone, we are providing answers to the questions we have received to the market all at once through this release, and we will conduct an investor conference call tomorrow right after the close of the market. Answers to those questions we can answer at this time are provided below."
Q. What is the current cash position of Simulations Plus, Inc.
post-transaction, and should we expect the dividend to continue at the
current rate?
Q. Does Cognigen have any debt?
Q. What will be the name of the new company?
Q. What share price will be used to determine the number of shares to be
issued to the Cognigen shareholders?
Q. Is a Simulations Plus shareholder vote required?
Q. Does Cognigen have similar revenue seasonality to Simulations Plus,
Inc.?
Q. What will the expected $5 million in new revenues add to EBITDA and
EPS?
Q. At what rate over the trailing 12 months has Cognigen been growing
revenue and net income?
Q. What cost synergies are expected? A2. A second potential synergy involves Cognigen's in-house cloud facility - a modern, secure capability used in their work. The capacity of the Cognigen cloud should be approximately doubled at minimal cost to accommodate hosting Simulations Plus software. Several Simulations Plus customers are currently asking for cloud-based capabilities and management has been testing using the Amazon cloud. Whether the Company would remain on the Amazon cloud or move some or all of the cloud-based offerings to the Cognigen cloud will require a study to determine the most cost-effective way to operate. Cognigen has built a resource and has IT staff who are familiar with not only operation of the cloud, but such activities as programming for parallel processing, and management anticipates there should be benefit to Simulations Plus as well as Cognigen. A3. A third potential synergy is expected from the Simulations Plus customer base, which is larger than Cognigen's and includes most of Cognigen's customers, but from different departments. Cross-selling will be a focus, as each company will have the opportunity to be introduced to the other's customers and relationships.
Q. Aside from the revenue metrics, what financial metrics and multiples
were used in determining the purchase price?
Q. What are the cross-selling opportunities for customers of both
companies?
Q. Where do Cognigen's product offerings fit within Simulations Plus'
product suite? Are there any competitive products or expected
cannibalization of revenue from overlap?
Q. Is all of the software used by Cognigen homegrown/fully owned by the
company? Investor Conference Call The Company will hold an investor conference call on Friday, July 25, at 1:15 PM PT/4:15 PM ET. The call will be webcast live and may be joined by registering at the following website: https://www2.gotomeeting.com/register/346573050. Upon registering, you will receive a confirmation e-mail with a unique link and instructions for joining the call. Please dial in five to ten minutes prior to the scheduled start time. For listen-only mode, you may dial 646-307-1705, and enter access code: 630-706-152. Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 - With the exception of historical information, the matters discussed in this press release are forward-looking statements that involve a number of risks and uncertainties. Words like "believe," "expect" and "anticipate" mean that these are our best estimates as of this writing, but that there can be no assurances that expected or anticipated results or events will actually take place, so our actual future results could differ significantly from those statements. Factors that could cause or contribute to such differences include, but are not limited to: our ability to maintain our competitive advantages, acceptance of new software and improved versions of our existing software by our customers, the general economics of the pharmaceutical industry, our ability to finance growth, our ability to continue to attract and retain highly qualified technical staff, our ability to properly manage the new combined company, and a sustainable market. Further information on our risk factors is contained in our quarterly and annual reports as filed with the U.S. Securities and Exchange Commission.
|