LONDON (Alliance News) - Bioquell PLC shares were up by a third early Thursday after the company said it will sell its specialist testing subsidiary TRaC to Element Materials Technology Group Holdings Ltd for GBP44.5 million in cash, and will return most of the proceeds to its shareholders.
In a statement, the specialist microbiological control technologies company that will now be focused on biological contamination control, said the gross cash proceeds from the disposal equate to about 105 pence per Bioquell share, well above the 82 pence closing price for the stock on Wednesday. Its shares were up 34% at 110.00 pence early Thursday.
"The board of Bioquell decided earlier this year to seek offers for TRaC in order to simplify the group and realise value for shareholders," Bioquell Chairman Nigel Keen said.
"It has become increasingly clear that the time is right to sell TRaC. The improved prospects of our main Bio division - due to an improved product mix and targeted cost savings - and the inherent value of TRaC have not been properly reflected in the Bioquell share price over recent months. The disposal will enable us to focus on our core Bio-decontamination business and take advantage of the growing opportunities in our core Healthcare, Life Sciences and Defence markets," he added.
It said it expects the majority of the proceeds from the sale of TRaC to be returned to shareholders "in due course".
TRaC made revenue of GBP16.8 million and an operating profit of GBP3.4 million in 2013, while Bioquell's remaining biological contamination control business made revenue of GBP27.9 million in the same year.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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