Veeva has acquired Physicians World for an undisclosed sum.
Physicians World has developed software and logistics services for speakers bureaus.
VEEV is likely acquiring PW for its logistics service capabilities which it hopes to combine with its events CRM system to further differentiate itself in the life science industry.
Physicians World has developed software and logistics services for speakers bureau operators.
With the acquisition, VEEV is gaining a logistics service organization that it can pair with its existing life science events CRM software to differentiate its offering with clients and prospective customers.
Target Company & Market
Lyndhurst, New Jersey-based Physicians World was founded to provide a full service offering to assist speakers bureaus in all aspects of their logistics operations.
Management is headed by Chief Executive Officer Mark Fleischer, who has been with the firm since 2015 and was previously Group President of KnowledgePoint360 Group, a healthcare communications firm.
The firm’s primary offerings include:
Automated workflow software for speakers, venues
Logistics management for training
Financial reconciliation and payment processing
Business process outsourcing
According to a 2019 market research report by RedPropeller, the 2019 outlook for the speaking industry features steady growth expectations but somewhat disappointing budget increases while travel and accomodations costs are rising.
Additionally, commission rates are expected to trend downward.
As a result, there is a greater emphasis on differentiated content by speakers, avoiding ‘motivational or inspirational fluff.’
Corporate events are desiring speaking programs to help attendees ‘increase productivity, profits, performance, communication, employee retention, increase shareholder value.’
This represents a forecast CAGR (Compound Annual Growth Rate) of
Acquisition Terms & Financials
VEEV didn’t disclose the acquisition price or terms and didn’t file a form 8-K or provide a change in financial guidance, so the deal was probably for a financially non-material amount.
A review of the firm’s most recent published financial results indicate that as of July 31, 2019, VEEV had $1.4 billion in cash and short-term investments and $414.8 million in total liabilities, with no long-term debt.
Free cash flow for the six months ended July 31, 2019, was $334.5 million.
In the past 12 months, VEEV’s stock price has risen 45.8% vs. the U.S. Healthcare Services industry’s growth of 15.6% and the overall U.S. Market’s rise of 8.4%, as the chart and corporate events graphic indicates below:
Source: Simply Wall Street
Earnings surprises have been positive in all twelve of the last twelve quarters, as shown in the chart below:
Source: Seeking Alpha
Analyst sentiment in recent earnings calls has been steadily dropping since mid-2018, as the linguistic analysis shows here:
VEEV acquired Physicians World after having partnered together for several years.
As Veeva CEO Peter Gassner stated in the deal announcement,
Physicians World has been a strategic partner to Veeva for many years and has a track record of delivering exceptional services and customer success. We’re excited to welcome the Physicians World team to Veeva. By bringing together best-in-class software and services, we’re making it easier for life sciences to leverage events as part of a more holistic engagement strategy and build stronger customer relationships.
With the acquisition, VEEV is essentially hoping to combine Physicians World’s logistics and service capabilities with its CRM Events Management software used by over 775 global life science firms in the pharmaceutical and biotech industries.
It’s likely that PW’s software will be deemphasized and VEEV will put PW’s team to work on the logistics side so it can offer a combination of software and logistics services to its clients and prospects in order to provide a more complete offering.
If so, it makes strategic sense to provide what are essentially customer support services as a value-add proposition to differentiate its software offering to prospects.
While we don’t know how much VEEV paid for the deal, I like the rationale for it as VEEV seeks to continue its growth trajectory.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.