Dassault Systemes SA Chief Executive Officer Bernard Charles Interview...Bernard Charles, chief executive officer of Dassault Systemes SA, poses for a photograph following a Bloomberg Television interview in London, U.K., on Thursday, Oct. 24, 2013. Dassault Systems said it may reduce its fourth-quarter revenue target by 20 million euros to as low as 565 million euros to reflect shifts to renting, transaction delays as well as currency weakness in emerging economies. Photographer: Simon Dawson/Bloomberg
Bernard Charlès, chief executive of Dassault Systèmes: ‘This is the largest deal in our history by a factor of seven or eight’ © Bloomberg

Dassault Systèmes has agreed to buy Medidata, a US specialist in analysing data from clinical trials, in the largest deal yet for the software group as it looks to push into the fast-growing life sciences sector.

The French group, which counts the billionaire Dassault family as its biggest shareholder, is paying cash for Medidata in a deal that values the New York-based company at $5.8bn, including debt.

Medidata, “is the world leader in the middle of the clinical trial process . . . and this is the largest deal in our history by a factor of seven or eight,” Dassault Systèmes chief executive officer Bernard Charlès said in an interview.

Analysts at Citi cautioned that the scale of the acquisition posed a risk for the French group, one of Europe’s largest software companies. Shares in Dassault Systèmes, which have risen almost 30 per cent this year, were down 1.5 per cent in early afternoon trading in Paris.

Medidata’s technology is used by about 1,300 customers in the development and commercialisation of drugs. The company generated revenues of $636m in 2018.

Mr Charlès said that Dassault Systèmes planned to use the acquisition to strengthen its position in life sciences technology, arguing that Medidata’s huge data set — built through thousands of clinical trials over the past 20 years — would prove a valuable asset.

“It’s really a data platform . . . There is significant value when clients want to do a new clinical trial, if you can understand better what others have done, you can better understand the side effects,” said Mr Charlès.

The deal values shares in Nasdaq-listed Medidata at $92.25, below the closing price of $94.75 on June 11. The stock has risen recently amid speculation Medidata would become a takeover target.

The analysts at Citi added that the purchase “appears sound in principle although we would appreciate greater clarity around the planned implementation.” 

They also noted that there were “strategic benefits in terms of cross-selling and improved customer access” as Medidata had a presence in 18 out of the top 25 pharma firms and nine out of 10 of the top contract research organisations.

France’s Dassault family, which controls aerospace company and Rafale jet producer Dassault Aviation, owns 40 per cent of Dassault Systèmes. Serge Dassault, the billionaire French defence industrialist and politician at the head of the family, died last year.

The deal has been unanimously agreed by the boards of both companies. It is expected to close in the final quarter of 2019, subject to regulatory and shareholder approval.

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