Covalent Group acquires Remedium, becomes Encorium BioSolutions

By Lisa Kerner

Erie, Pa., March 3 - Covalent Group, Inc. said it entered into a definitive combination agreement with Remedium Oy, under which it will acquire all of the outstanding shares and common stock equivalents of Remedium Oy for $16 million in Covalent shares and $4 million cash.

The transaction is expected to close in the second quarter, according to a company news release.

The new combined company will be named Encorium BioSolutions Inc. and will be based in Wayne, Pa., with European operations based in Espoo, Finland. Covalent has applied for a new ticker symbol and listing for the company on the Nasdaq Small Cap market.

Encorium will design and manage clinical trials and patient registries for the pharmaceutical, biotechnology and medical device industries. The company's goal is to have revenues in excess of $100 million by 2010, according to the release.

Remedium president and chief executive officer Kai Lindevall will become Encorium's president of European and Asian operations and will report to Covalent president and chief executive officer Kenneth M. Borow, who will become Encorium's president and chief executive officer.

"We believe that this transaction represents a breakthrough event in Covalent's history," Borow said in the release.

"Previously, new business contracts of significant size and scope had been difficult to win when Covalent and Remedium were operating as stand-alone companies. The combined company will be able to compete for a broader range of global and regional new business contracts by virtue of its increased size, expanded geographic footprint, and depth of resources."

Covalent, based in Wayne, Pa., designs and manages clinical trials and Patient Disease Registries for the pharmaceutical, biotechnology and medical device industries.

Remedium is a full-service contract clinical research organization based in Espoo, Finland, that provides phase 1-4 clinical development of drugs and biologics to the pharmaceutical and biotechnology industries.

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