KUHN CAPITAL Thursday, October 19, 2017
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Dendrite Synapses with Synavant

May 25

Dendrite, developer of software that automates sales, marketing and clinical management for big pharma, announced on May 9th a tender offer for Synavant, another vendor of pharma CRM and e-business solutions, for $48 million in cash.

With about $230 million in profitable sales, Dendrite competes against the slightly larger and French-owned Cegedim. Slightly larger, that is, until Dendriteís purchase of Synavant, which Ė while it was generating sales of about $170 -- was losing money and sales. Now the combined entity will generate sales of about $400 million, and presumably internal synergies will cure Synavantís money-losing ways. In addition, Dendrite picks up more clients, a healthy diversification away from its current reliance on Pfizer and Bristol-Myers Squibb who together account for nearly half of its sales.

Therefore, despite the fact that Dendrite and Cegedim competed for Synavantís purchase, the deal still looks like a bargain to us.


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