Benzinga | Aug 6, 2021 08:11AM EDT

Certara To Buy Compliance Software Provider For $310; Q2 Earnings Beat Expectations, Raises FY21 Guidance

* Certara Inc (NASDAQ:CERT) has agreed to acquire Pinnacle 21 for $310 million in cash and stock.

* Pinnacle 21's software tools are used to validate compliance to the Clinical Data Interchange Standards Consortium (CDISC) standards, which the FDA requires, Japan's Pharmaceuticals and Medical Devices Agency, and preferred by China's National Medical Products Administration.

* The transaction's enterprise value is $310 million, including $250 million in cash and $60 million in Certara shares.

* Following closing in early Q4 of 2021, the transaction is expected to be accretive to Certara's revenue, revenue growth, and adjusted EBITDA margin.

* Certara also reported Q2 adjusted EPS of 0.03, missing the analyst consensus estimate of $0.05. It reported sales of $70.1 million, up 15% Y/Y beating the estimate of $69.40 million.

* Adjusted EBITDA increased marginally by 1% to $25.5 million.

* Outlook: Certara raised 2021 revenue guidance to $283 million - $289 million, from $277 million - $285 million.

* It forecasts adjusted EBITDA of $101 million - $103 million, compared with the earlier outlook of $100 million - $102 million.

* Certara sees adjusted EPS of $0.21 - $0.25 versus $0.20 - $0.24 previously. The updated guidance does not include the impact of the Pinnacle 21 acquisition.

* Price Action: CERT shares closed at $27.99 on Thursday.