Encorium buying one firm, merging with another

Encorium Group Inc., a clinical research organization based in Wayne, will expand its global reach by combining with Fine Success Investments Ltd., a British Virgin Islands company doing business as Linkcon, Encorium said.

Linkcon has acquired or is acquiring clinical research organizations in China, India and Latin America. Linkcon also holds a controlling interest in JK1, a health-care portal for medical professionals and consumers that links China and the western world.

Encorium also announced that it is buying Prologue Research International Inc. for $13 million. Prologue, an Ohio nonprofit clinical research organization, specializes in cancer clinical studies.

In the deal, Linkcon shareholders will get 12.5 million shares of Encorium stock. Chardan Capital LLC, a merchant bank working in China and founder of Linkcon, will raise $25 million to help Linkcon fund the acquisition and in return will get 10 million shares in the new venture.

Richard Propper, the founder of Chardan Capital, is also an investor in Encorium, which was formerly called Covalent Group Inc. There was no trading on Encorium's shares this morning, which closed yesterday at $1.65 on Nasdaq.

At closing, the annual revenue of the combined companies, including Prologue and Linkcon, is expected to be in the range of $50 million to $55 million, supported by a backlog at closing of approximately $65 million to $70 million.