Simulations Plus, Inc. (Nasdaq: SLP), a leading provider of modeling and simulation software and services for pharmaceutical safety and efficacy, today announced it has entered into an accelerated share repurchase agreement (the “ASR Agreement”) with Morgan Stanley & Co. LLC. to repurchase an aggregate of $20 million of the Company’s outstanding common shares. The ASR Agreement is part of the $50 million share repurchase program authorized by the Board of Directors on December 29, 2022. After completion of the repurchases under the ASR Agreement, $30 million will remain available for additional repurchases under the authorized repurchase program.
The company is funding the ASR with its available cash balances. Under the terms of the ASR Agreement, the Company will make an initial payment of $20 million to Morgan Stanley and will receive an initial share delivery of approximately 409 thousand shares of company common stock. Final settlement under the ASR Agreement, including any incremental share delivery, is expected to occur during or prior to the third quarter of fiscal 2023. The final number of shares to be repurchased by the company under the ASR Agreement will be based on the volume-weighted average price of the company’s common stock during the term of the ASR Agreement, less a discount and subject to adjustments in accordance with the ASR Agreement.
The ASR aligns with the Company’s updated capital allocation strategy, announced on January 4, 2023, which included:
- Evolving its corporate development strategy to include strategic investments and partnerships with companies that could lead to software and services portfolio innovation, increased leadership in computational biology, Total Addressable Market (TAM) expansion, and potential future acquisitions.
- Returning capital to shareholders through a $50 million share repurchase program.
- Continuing internal investment in scientific employee retention and recruiting and selectively adding new headcount and technology to drive revenue growth and increase efficiencies.