ST. LOUIS, Mo.—After recently being left at the altar, Tripos announced that it had reached a definitive agreement with Commonwealth Biotechnologies, Inc. (CBI) to sell its outstanding capital stock of Tripos Discovery Research (TDR). The deal comes less than three months after it failed to reach a suitable agreement for the same property with Provid Pharmaceuticals.
In continuing to operate TDR from its current base in Bude, U.K., CBI will gain a valuable foothold in Europe. According to CBI CEO Dr. Paul D'Sylva, the company expects to couple TDR's expertise in medicinal chemistry with CBI's expertise peptide chemistry, immunology, and genomics. This will allow the company to take a significant stab at a drug discovery outsourcing market that is projected to surpass $10 billion by 2012, according to a 2006 Frost & Sullivan report.
"The transaction positions CBI for sustained growth through the realization of cost synergies and revenue synergies that can accelerate cash flow growth; provision of additional sales and marketing expertise with offices in the U.K. and the U.S.; and alignment of business product and service capabilities with industry growth," D'Sylva says.
The transaction will see CBI pay an upfront fee of $350,000 and subsequent payments of up to $1.8 million based on receivables and billings. For its part, TDR is entering into a sale-leaseback transaction with the Southwest England Regional Development Authority (SWERDA), which will see TDR net cash of over $4 million, enter a 12-year lease in Bude, and be released from repayment obligations to SWERDA and the U.K. Department of Trade and Industry.