Encorium Group and Prologue Ink Acquisition LOI

WASHINGTON, Jun 12, 2008 (ASCRIBE NEWS via COMTEX) -- PRGU | Quote | Chart | News | PowerRating -- Encorium, a full-service, multinational CRO that provides design, development, and management capabilities for clinical trials and patient registries, announced that it has entered into a non-binding letter of intent to acquire Prologue Research International, a CRO that specializes in a full range of clinical research services for Phase I through Phase IV clinical trials in oncology and oncology-related studies.

Pursuant to the non-binding letter of intent dated June 6, the company will acquire all of the issued and outstanding shares of Prologue for $13.0 million, consisting of $4.5 million in cash and $8.5 million in a combination of non-convertible, non-redeemable senior subordinated debt and convertible, redeemable senior subordinated debt. The company intends to fund the cash portion of the purchase price with a loan procured by Chardan Capital in the amount of $5,000,000.

In addition to the $13.0 million in consideration that Encorium will pay to the existing Prologue security holders on closing of the transaction Encorium has made a $500,000 non-refundable cash payment to Prologue in exchange for Prologue s granting an exclusivity period to the company. The closing of the Prologue transaction is subject to completion of Encorium s due diligence, approval of the transaction by both parties Board of Directors and the signing of a definitive agreement. The closing is expected to occur in the third quarter of 2008.

Kai Lindevall, M.D., Ph.D., Encorium s Chief Executive Officer said, We believe that this acquisition, along with our announcement this afternoon of Encorium s letter of intent to combine with Linkcon, creates a firm foundation for Encorium to become a leading global service provider to the biopharmaceutical and medical device industries. As we have discussed in the past, our goal has always been to grow into a global, midsized CRO with expertise in multiple targeted therapeutic areas, including oncology. We believe that Prologue represents a compelling strategic acquisition opportunity for Encorium for many reasons including:

- Its historical growth and strong market position and reputation within the increasingly important oncology therapeutic area; - The multiple future organic growth opportunities offered by the combined organization; - The cross-selling opportunities to the clients of both companies and - The potential for a growing collaboration with The James Cancer Hospital and Comprehensive Cancer Center of The Ohio State University, whose recognition in the area of cancer therapy has grown globally over the last several years.

We believe that the Prologue team has done an impressive job of building a leading company in the oncology CRO market sector, and we are excited about the opportunity to add their capabilities to those of Encorium.

Tom Ludlam, President and CEO of Prologue, said, We have been impressed with Encorium throughout this entire process. Prologue s goal is to be the best-in-class global oncology CRO. By joining the Encorium Group, we will have immediate global reach which, when leveraged with our oncology expertise, should benefit both our customers and patients with cancer. We look forward to being part of this exciting venture and contributing to a combined company with tremendous potential for growth.

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