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Divesting its Communications Business, Simulations Plus Focuses on Pharmaceutical Market

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Simulations Plus is selling Words+, its computer-based communications systems subsidiary, so that it can focus on expanding its footprint in pharmaceutical markets, Walt Woltosz, the company's chairman and CEO, said this week.

The drug discovery software developer has signed a stock purchase agreement to sell Words+ — which provides systems for people dealing with speech loss and/or other motor skills — to Prentke Romich, a Wooster, Ohio-based firm, for $2.1 million.

The deal is expected to close on Nov. 30 to coincide with the end of the first quarter of Simulations Plus’ 2012 fiscal year.

Woltosz said the move is in response to continued requests from the company's shareholders.

Simulations' "simulation and modeling software and consulting services for pharmaceutical research and development ... have been the primary focus of our attention for the last 15 years," he said in a statement. In light of this, "our shareholders have often asked why we continue to operate two very different businesses."

As a result, "earlier this year, the board of directors decided to investigate the possible sale of Words+ so that we could focus our attention on the higher margin pharmaceutical software and consulting services business,” he said.

In September, Simulations attempted to expand its life sciences product portfolio when it entered a $1.75 million bid for the assets of the now bankrupt biosimulation software developer, Entelos (BI 9/23/2011).

Simulations' bid was beaten by a counter offer of $1.95 million from secured lending firm Imperium Master Fund (BI 9/30/2011).

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