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Dassault Agrees to Buy Medidata in $5.8 Billion Health Deal

Ed Hammond, Ruth David and Manuel Baigorri

(Bloomberg) -- French technology company Dassault Systemes SE will buy Medidata Solutions Inc., a software firm that analyzes clinical trials, in a deal that gives the U.S. company an enterprise value of $5.8 billion.

The all-cash deal, which will bolster Dassault’s life-science unit, values Medidata at $92.25 a share. That’s 17% more than Medidata’s closing price on April 18, the last trading day before Bloomberg reported Dassault’s interest in the New York-based company.

The deal is expected to close in the final quarter of 2019, the companies said in a statement.

Healthcare has become a core market for Dassault, said Pascal Daloz, Chief Financial Officer, in a call with reporters. He expects to see synergies stemming from market expansion, and cost synergies seen in research and development and cloud. The deal is expected to be accretive as soon as 2020.

Drugmakers are outsourcing many of the non-core parts of their research and development efforts to cut down on costs and use specialized providers of services and technology.

Dassault, with a market value of 36 billion euros ($41 billion), offers software and services for industries ranging from aerospace and defense to consumer goods and life sciences. The Vélizy-Villacoublay, France-based company counts the majority of the major drug makers as its clients, according to data compiled by Bloomberg.

Medidata counts most of the biggest drug companies in the world as customers, according to supply-chain data compiled by Bloomberg. It provides a cloud-based subscription service that helps medical device, diagnostic and pharmaceutical companies manage and analyze clinical trials. Its revenue more than doubled from 2013 to 2018, when it brought in $635.7 million.

Daloz said the deal is the first time the company has resorted to external funding, and will be financed by a 3 billion euro bond. The company already has 1.8 billion in cash available for the deal.

(Updated with CFO comments.)

--With assistance from Liana Baker and Geraldine Amiel.

To contact the reporters on this story: Ed Hammond in New York at ehammond12@bloomberg.net;Ruth David in London at rdavid9@bloomberg.net;Manuel Baigorri in Hong Kong at mbaigorri@bloomberg.net

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, ;Giles Turner at gturner35@bloomberg.net, Jeff Sutherland, Thomas Mulier

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