Healthcare IT services provider Instem Life Sciences is buying Cambridge-based BioWisdom, which supplies software to analyse R&D-related healthcare data.

AIM-quoted Instem is paying an initial enterprise value of £900,000, although that figure could increase to £1.5m depending on performance in 2011 and 2012. The BioWisdom software is a good fit with Instem's Centrus product suite, which was launched last September.

Less than one-fifth of BioWisdom's customers are also customers of Instem. The deal increases the market that the group can address.

More than two-thirds of BioWisdom's revenues are recurring. In 2010, BioWisdom generated revenues of £1.55m.

BioWisdom founder Dr Gordon Baxter becomes chief scientific officer of Instem.

Biotech Growth Trust owned a small stake in BioWisdom.

Related share prices
Biotech Growth Trust (The) (BIOG) share price
Instem (INS) share price