Proposed placing to raise £22.0 million
Offer to qualifying participants to raise up to £4.0 million
EKF Diagnostics Holdings plc (AIM: EKF), the point-of-care diagnostics business, announces that it has entered into a conditional agreement to acquire Selah Genomics, Inc. (“Selah”), a US based developer of molecular diagnostics for personalised medicine, and a conditional agreement to acquire DiaSpect Medical AB.(“DiaSpect”), a Swedish based manufacturer of point-of-care haemoglobin analysers.
In addition, EKF proposes to raise £22.0 million (before expenses) by way of a firm placing of 14,285,714 new Ordinary Shares (“Firm Placing Shares”) and a conditional placing of 48,571,428 new Ordinary Shares (“Conditional Placing Shares”) (together “the Placing Shares”) at a placing price of 35p (“the Placing”) through an accelerated bookbuild process conducted through Canaccord Genuity Limited (“the Bookbuilding Process”) representing 23.0 per cent. of the Company’s existing issued share capital. The Company is also seeking to raise up to £4.0 million by way of an offer to Qualifying Participants (“the Offer Shares”). The full announcement can be downloaded here as a PDF.
The Placing will be completed on a non pre-emptive basis and the Placing Shares are being placed with certain institutional investors.
The consideration for the acquisition of Selah comprises of an initial consideration of US$35.6 million, to be satisfied by the issue of new Ordinary Shares in the Company and an additional deferred consideration of up to US$35.0 million, valuing Selah at up to approximately US$70.6 million (net of US$4.4 million in borrowings). The consideration for the acquisition of DiaSpect will be satisfied by an initial consideration of £10.25 million in cash and £5.75 million in new Ordinary Shares in the Company, and an additional deferred cash consideration of up to £4.75 million, valuing DiaSpect at up to approximately £20.75 million.
The Board believes that the two acquisitions, combined with the acquisition of Separation Technology, Inc., announced on 12 March 2014, will allow EKF the opportunity to achieve its aim of becoming the number one in point-of-care haemoglobin testing through a comprehensive and cost effective product range, as well as enabling EKF to participate meaningfully in personalised medicine, which the Board believes will be the fastest growth area within the IVD industry.
Julian Baines, CEO of EKF commented: “These acquisitions provide us with a huge opportunity to establish ourselves as a leading global player in point-of-care haemoglobin testing and to consolidate our position in molecular diagnostics and personalised medicine, an area that we consider to be one of the most exciting areas in diagnostics. My Board colleagues and I believe that these acquisitions will deliver an enhanced return to our shareholders and we expect the transactions to be earnings enhancing, both individually and in aggregate, from year one.”
The issue of new ordinary shares of the Company in connection with the Acquisitions, Conditional Placing and Offer are subject to the approval of the shareholders of the Company at a General Meeting to be held at 10.30am at Canaccord Genuity Limited, 41 Lothbury, London, EC2R 7AE, United Kingdom on 11 April 2014.
The Board unanimously recommend that you vote in favour of the Resolutions at the General Meeting, as they intend to do in respect of their own beneficial holdings of Ordinary Shares amounting to, in aggregate, 11,504,851 Ordinary Shares, representing approximately 4.2 per cent. of the Existing Ordinary Shares.