11th Mar 2020 12:13
(Alliance News) - AorTech International PLC on Wednesday said it intends to buy fellow medical device developer and manufacturer RUA Medical Devices Ltd for GBP2.5 million total.
AorTech said it has agreed with Non-Executive Director David Richmond - also owner of RUA Medical Devices - to purchase RUA for GBP950,000 in cash and 1.5 million shares at GBP1 each, representing a premium of 34% to their closing price of 74.50p on Tuesday.
The stock was trading 7.3% higher at 79.95 pence each at midday Wednesday in London.
For the year to the end of April 2019, RUA posted pretax profit of GBP150,000 on revenue of GBP1.6 million. Net assets at the end of the period stood at GBP1.2 million.
The company said that following the acquisition, it will change its name to RUA Life Sciences PLC, with Richmond taking over as chief executive. He will have a 9.5% stake in the enlarged company.
AorTech said the acquisition effectively internalises the manufacturing process for its patches and graft products for implants.
"This deal is a perfect strategic fit for the company providing the people, processes and premises to allow our world-class polymers to be converted into medical device products. We are delighted that David has demonstrated his belief and confidence in the prospects for all of our Elast-Eon enabled devices by taking a substantial interest in the company," AorTech Chair Bill Brown.
In January, Aortech had said it extended its partnership with RUA Medical Devices in relation to the development of soft tissue patches and large bore vascular grafts.
Aortech said that the project - which now lasts for over 18 months - combines RUA Medical's expertise as an implantable fabric specialist, and biocompatible properties of AorTech's Elast-Eon, an implantable biostable polymer.
The acquisition of RUA Medical Devices is subject to shareholder approval.
By Ife Taiwo; [email protected]
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