30th Apr 2013 07:00
SOURCE BIOSCIENCE PLC - Acquisition(s)SOURCE BIOSCIENCE PLC - Acquisition(s)
PR Newswire
London, April 29
Source BioScience plc (LSE: SBS), the international diagnostic and geneticanalysis services business, announces the acquisition of the entire issuedshare capital of Inverclyde Biologicals Limited (`Inverclyde Biologicals'),Motherwell, Scotland for a total consideration of £1.6 million payable in cash.
Highlights
* Inverclyde is a market leading manufacturer of high quality diagnostic kits and blood group serology reagents * Consideration of £1.6 million; cash acquired with the business of £0.3 million * Revenue of £0.7 million; £0.2 million profit before tax and cash generated from operations * Complementary with existing Source BioScience healthcare products business with the same high standards for quality and service and a strong reputation within the NHS * Creation of new cross-selling opportunities, an extended customer base and better utilisation of existing infrastructure * Inverclyde Biologicals' expertise in designing and manufacturing clinical grade reagents complement the Group's expansion plans for the reSource™ range of life science products * Geographic expansion into Scotland, providing the opportunity to establish an Overnight Service for DNA sequencing accessible by the Scottish research community * The current Inverclyde Biologicals directors are both remaining with the Group and bring a well regarded and qualified talent, together with a dedicated, highly skilled and knowledgeable workforce.Dr Nick Ash, CEO of Source BioScience, said: "The acquisition of InverclydeBiologicals fits squarely with our stated objective of continued expansionthrough both targeted acquisitions and development of our existing business.This acquisition provides a platform for increased penetration of the UKhealthcare market, acting as a catalyst for our accelerated growth. TheInverclyde Biologicals team will bring significant experience and knowledge tothe Group and we will be able to leverage the enlarged Group's existing linkswith healthcare providers across the UK and distributor network overseas."
For further information, please contact:
Source BioScience plcNick AshChief Executive OfficerTel: +44 (0)115 973 9010www.sourcebioscience.comFor investor and media enquiries:
N+1 Singer (Financial Advisor, Sponsor and Broker)Aubrey Powell/Joe StroudTel: +44 (0)207 496 3155www.nplus1singer.com College Hill (PR Agency to Source BioScience)Melanie Toyne-Sewell/Stefanie BacherTel: +44 (0)207 457 2020Mob: +44 (0)7792 693760Email: [email protected]Acquisition of Inverclyde Biologicals
Introduction
The Board announces the acquisition of the entire issued share capital ofInverclyde Biologicals Limited for a total consideration of £1.6 millionpayable in cash. The expenses of the transaction are anticipated to amount to £0.1 million.
Based in Motherwell, Inverclyde Biologicals is a market leading manufacturer ofhigh quality diagnostic kits and blood group serology reagents. InverclydeBiologicals was founded over 30 years ago and has built a specialism andreputation for manufacturing superior quality products, supplying a largepercentage of the UK market. The Company has established a robust and long termcustomer base including NHS Blood and Transplant and many NHS Trusts.
The business is cash generative from operations and made a profit before tax of£0.2 million in the year ended 30 April 2012 on revenue of £0.7 million. Oncompletion, which is subject only to the preparation of completion accounts, itis anticipated that the acquired business will have net cash of £0.3 million.As at 30 April 2012, Inverclyde Biologicals had total gross assets of £0.3million and no bank borrowings or other financial liabilities.
The acquisition will bring considerable know how and flexibility in terms ofboth scientific and manufacturing capability which will enhance SourceBioScience's existing Healthcare product portfolio and enable the Group tobroaden its addressable market.
Background and reasons for the transaction
The Group's strategy is to grow its Healthcare and LifeSciences businessthrough organic growth from existing operations combined with selectedacquisitions to broaden the portfolio of products and services.
Source BioScience has built its Healthcare business on traditionalhistopathology expertise and is at the forefront of cervical cancer screeningin the UK. Source BioScience has also established a diagnostic referencelaboratory offering a comprehensive suite of tissue-based pathology andmolecular diagnostics from fully accredited laboratories. The UK NHS iscurrently the largest customer for the Group's portfolio of products andservices with which it has established an excellent reputation for clinicalexpertise, quality and service.
Inverclyde Biologicals is a private company established in 1983 in Motherwell,Scotland and is managed and owned by its two founder directors. The company'sprimary customer base has been the UK NHS and it has forged strong andlong-established links with NHS Blood and Transplant and many NHS Trusts acrossthe UK.
Inverclyde Biologicals manufacture a portfolio of products complementary withthat offered by Source BioScience and it is anticipated that the combinationwill create new cross-selling opportunities and better utilisation of existinginfrastructure.
The manufactured products fall broadly into four categories:
* Phosphate Buffered Serology Saline (`PBSS'); the most significant product line by revenue is used as a "wash" solution for human red blood cells prior to blood grouping and serological antibody investigation. Inverclyde Biologicals is the largest serology saline manufacturer in the UK * Foetal cell detection kit; this product detects foetal cells in circulation in maternal blood. Demand for this product is strong because of the requirement in the UK to test a mother's blood within 72 hours of birth * Tissue reagents; a range of products used by tissue services including antibiotics and cryopreservative media * Other products; a range of other products that complement the core product range.Benefits of the acquisition
The acquisition is expected to bring a number of benefits to Source BioScience,including:
* Complementary products and commercial efficiency; the acquired portfolio is highly complementary with the Group's existing Healthcare products business with the same high standards for quality and service and a strong reputation within the NHS. All the blood bank products are CE-marked and conform to stringent biomedical parameters. It is anticipated that the combination will facilitate better utilisation of existing infrastructure, particularly through the sale of an extended range of products and services to common customers * Expanded product offering and enlarged customer base; by making available the additional blood banking, serology and diagnostic products to the Group's customers. These products are extremely complementary with Source BioScience's existing Healthcare products and services. The enlarged Group will be able to offer immediate access to a broad range of trusted formulations * Creation of new cross-selling opportunities; to offer Source BioScience's diagnostic services to Inverclyde Biologicals' existing product customers and vice versa * Geographic expansion; the opportunity to establish a laboratory in Scotland will provide local access to the Overnight Service for DNA sequencing, consistent with the Group's strategy of operating a network of laboratories close to major life science research centres; and * In-house manufacturing capabilities;Inverclyde Biologicals' expertise in designing and manufacturing clinical grade reagents creates opportunities for additional margin capture on solutions and reagents the Group currently resells to its Healthcare (Cytology) and LifeSciences products customers; this also complements the Group's expansion plans for the reSource™ range of life science products.Summary
Source BioScience has continued to strengthen its position across both itsdivisions through a combination of organic growth and targeted acquisitions.The acquisitions have been successfully integrated and the Group now offers arange of expert products and services to the healthcare sector and for use in abroad spectrum of life science applications.
Source BioScience and Inverclyde Biologicals bring together complementaryskills, expertise and product portfolios which will help Source BioScienceenhance its position as a leading provider of diagnostic laboratory productsfor Healthcare. The management of Inverclyde Biologicals will add significantlyto the depth of experience and knowledge in Healthcare and bring links tocustomers beneficial to the Group.
--- ENDS ---About Source BioScience
Source BioScience plc (LSE: SBS) is an international diagnostic and geneticanalysis services business serving the healthcare and research markets. TheLifeSciences division provides core laboratory research support fromconceptualisation to implementation, calling upon a wide range of cutting-edgetechnology platforms including an online catalogue of biomolecular tools. TheGroup is a trusted provider of a complete range of sophisticated microarray,next generation and conventional sequencing services. GLP, GCP and CPAaccreditations make the sequencing offerings also very attractive forapplications in regulatory studies or clinical settings. Its Healthcareoperations provide screening and reference laboratory diagnostic testing forcancer and other diseases and additional predictive testing for treatmentoptimisation for clinicians and patients. The Group has its headquarters inNottingham, UK. Further information about Source BioScience can be found atwww.sourcebioscience.com.
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