European base for Medeva

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MEDEVA, the pharmaceuticals group, returned to the acquisition trail yesterday with its first European deal, the Fr93.75m ( pounds 11.6m) purchase of the Paris-based Institut de Recherche Corbiere.

Medeva, which has ambitions to build a global sales infrastructure and recently made a number of US acquisitions to this end, wants IRC as a first step in forming a European marketing network.

The intention is to sell its prescription products through IRC's extensive sales team, particularly its flu vaccine Fluvirin, provided it receives the necessary licence.

IRC, with negative net assets of Fr1m ( pounds 120,000), lost Fr4.74m ( pounds 570,000) in the year ended 31 December 1991.

But David Lees, Medeva's financial director, said most of the losses related to costs incurred in building up its sales team.

Despite intending to boost IRC's 53-strong sales force to around 75 over the next year, Mr Lees expects IRC to make a profit of around pounds 1m this year.

Of the total consideration, Fr40m is payable immediately in cash and a further Fr53.75m after one year.

At the option of each IRC shareholder, Fr43.75m of this may be satisfied by the issue of new Medeva shares, which then have to be held for at least a year.

A further Fr16.25m worth of bonuses to directors and potential performance fees for the sales force is payable over five years from the date of completion. Two directors have been granted five- year contracts with Medeva.

The shares lost 2p to 219p.