Alliance Pharma plc (AIM: APH), the speciality pharmaceutical company, announces that its wholly owned subsidiary Alliance Pharmaceuticals Limited has conditionally agreed to buy the UK and Irish rights to the brands AnbesolTM and Ashton & ParsonsTM from a subsidiary of Reckitt Benckiser Group plc ("Reckitt Benckiser") for £2.55m cash consideration. Alliance intends to fund the acquisition by drawing a loan from the £20m Revolving Credit Facility ("RCF") that was put in place in November 2010 to fund acquisitions. The RCF is not currently utilised.
Anbesol is used to treat mouth ulcers, teething pains and denture irritation. Ashton & Parsons is used in infants for the symptomatic relief of pain and stomach upset caused by teething.
As part of the acquisition by Reckitt Benckiser of SSL International plc, Reckitt Benckiser plc has given commitments to the European Commission to divest Anbesol and Ashton & Parsons. The sale of the brands by Reckitt Benckiser to Alliance is conditional on the approval of the European Commission.
For the twelve months ended 31 December 2010 Anbesol and Ashton & Parsons sales were £1.3m and £0.8m respectively. Sales of Ashton & Parsons in the past few months have been somewhat lower than historically as a result of certain production issues which Alliance will be seeking to resolve. The gross margin rates of Anbesol and Ashton & Parsons are in line with other products in Alliance's existing portfolio.
Based on the contribution from Anbesol alone, the proposed acquisition is expected to be earnings enhancing in the current financial year.
TB needs new shares to publish his magazine, so he needs to get rid of some of them. Since APH was recommended, SP has been between 30-35p range, so he doesnt want to wait. However, I have checked his updates and in every single update, even one week before his sell advice, he was very bullish about APH with target of 60p, there is no reason to sell in reality. I am in and wont be out before at least 60p. This is a strong and very straightforward company without complicated things. gla
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