EKF Diagnostics Holdings plc (AIM: EKF) announces that it has reached agreement to sell its wholly owned subsidiary Selah Genomics, Inc (“Selah”), a US based developer of molecular diagnostics for personalised medicine, to the co-founders, Michael Bolick and Jeremy Stuart (the “Purchasers”).
The consideration for the acquisition of Selah by EKF was US$35.6 million paid in shares on 17 April 2014. Selah reported a loss after tax for the period from acquisition to 31 December 2014 of £0.6 million and has unaudited loss after tax for the period from 1 January 2015 to 30 November 2015 of £2.6 million. As at 31 December 2014 Selah was disclosed in the Company’s balance sheet in intangible assets at a value of £41.4 million, which will now be written off. Selah as at 31 December 2014 had net liabilities of £3.6 million.
The Board estimate the future annual cost saving to EKF will be in the region of £2 million. The consideration paid by the Purchasers is nominal. The sale and purchase agreement with the Purchasers contains additional consideration provisions in favour of EKF. In the event that Selah secures further equity funding within twelve months from today’s date, EKF will obtain a 10% equity interest in Selah. Alternatively if no external funding is obtained and if Selah or its business are sold, EKF will receive 10% of the net proceeds of such a sale.
Michael Bolick as a director of Selah is a related parties of the Company therefore the sale of Selah constitutes a related party transaction. EKF’s Directors consider, having consulted with its nominated adviser, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.
Ron Zwanziger, Non-Executive Chairman, commented:
“Today’s sale of Selah, with the associated cost savings, is another step towards re-establishing EKF as a profitable, cash-generating point-of-care diagnostics business.”
|EKF Diagnostics Holdings plc
Ron Zwanziger, Non-Executive Chairman
Julian Baines, CEO
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