Date: 2014-05-27
Type of information:
Acquired company: Lab21 (UK)
Acquiring company: Novacyt (France)
Amount:
Terms: * On May 27, 2014, Novacyt, a French diagnostics manufacturer that develops and markets innovative solutions in liquid-based cytology for cancer detection, including cervical cancer and all the other non-gynaecological cancers, announced its plans to combine in a stock-for-stock transaction with Lab21, the Cambridge, UK-based global specialist in personalised medicine and clinical diagnostics.On completing the transaction, Lab21 will become a 100% subsidiary of Novacyt, and the combined group will be rebranded. The transaction agreements have been approved by the Boards of Directors of each company and the shareholders of Lab21, including some renowned medical and life-science venture capital and private-equity institutions. Completion of the transaction is subject to approval by the Novacyt shareholders at the extraordinary general meeting (EGM) on June 13, 2014. Under the terms of the proposed share capital increase of Novacyt 2,523,059 Novacyt shares will be issued to Lab21 shareholders at an exchange ratio of 0.925 Novacyt share for one Lab21 share, as remuneration of the Lab21 shares contribution in kind. Upon completion of the proposed transaction, 54% of Novacyt fully diluted share capital will be held by Novacyt’s actual shareholders and 46% by the current Lab21 shareholders. The total transaction value upon completion is expected to be ca. €40m. The new Novacyt shares will be traded on NYSE-Alternext.
Details: The combined group will create an emerging diagnostics leader with a portfolio of cancer and infectious diseases diagnostic products and services. It will benefit from significant complementary strengths with Novacyt’s R&D capacities and the commercial infrastructure, manufacturing and extensive network of collaboration partnerships of Lab21. This will result in operations based in France, UK, China and Australia and distribution covering over 100 countries, across Europe, the Americas, and Asia-Pacific, including China.
Immediate revenues will come through the sale of the proprietary screening platform developed by Novacyt, NovaPrep® and the existing Lab21 oncology and infectious disease business. Future revenues will come through the increased distribution network and launch of new products by the combined group.
Within the combined business, significant synergies are expected involving manufacturing, distribution and R&D. Lab21 will manufacture some of NovaPrep® consumables bringing a major revenue source for the Novacyt technology inhouse, control of its supply chain and therefore driving significant gross margin improvements. Furthermore, Lab21’s market and distribution channels are expected to open up new sources of business to Novacyt.
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