Publicis Healthcare Communications Group (PHCG) is acquiring PDI's Commercial Services operation (CSO) that features a contract sales organization and other fee-for-services businesses in the medical and clinical areas.
Publicis is paying $33 million to acquire the operation, plus expected earn-outs based on 2016 revenue. While there are no assurances that this payment will be achieved, PDI expects the earn-out payment to range between $5 million to $15 million if certain CSO client commitments are obtained.
With the acquisition of PDI, PHCG’s salesforce will number more than 4,000 healthcare professionals and will further strengthen the group's ability to provide customized sales, service and clinical teams.
PDI is selling the CSO unit to concentrate on its molecular diagnostic business. After closing of the transaction, PDI will change its corporate name to Interpace Diagnostics Group as well as its NASDAQ trading symbol to IDXG.
PHCG is buying a business that has potential but is dependent on competitive pitches, similar to the advertising industry. So far this year, PDI's commercial team landed new, multiyear contracts worth about $45 million--with more than 45% of this value expected to be recorded as 2015 revenue. These new contracts cover the healthcare industry spectrum from pharmaceuticals to medical devices.
“We believe the addition of the PDI CSO business will enhance our position as a leading commercialization partner to pharmaceutical and biotech companies globally," says Nicholas Colucci, CEO of Publicis Healthcare Communications Group.
This transaction, which has been unanimously approved by the board of directors of both companies, is still subject to PDI’s stockholder approval and other closing conditions. Stockholders representing approximately 46% percent of PDI’s outstanding shares have agreed, subject to certain conditions, to vote in favor of the transaction, the companies said.