Last checked at 15 Jan 2009 09:24
Avacta Group plc Acquisition of Theragenetics Limited
Avacta Group plc ("Avacta" or the "Company"), which develops detection and analysis technology aimed primarily at the pharmaceutical and healthcare markets, with additional applications in the industrial and security sectors, is pleased to announce the acquisition of Theragenetics Limited ("Theragenetics") ("the Acquisition").
The maximum consideration is £2,050,000 payable by the issue of up to 67,566,667 Avacta ordinary shares of 0.1p ("Avacta Shares") each fully paid at 3p per share, a 14% premium to the closing midmarket share price on 14 January 2009, the latest practicable date prior to the release of this announcement, and £23,000 in cash.
The consideration payable at completion ("Initial Consideration") for the Acquisition is £1,000,000 which will be satisfied by £23,000 cash and the issue of 18,922,612 Avacta Shares ("Initial Consideration Shares") and approximately £409,000 of Convertible Loan Notes convertible into 13,644,055 Avacta Shares.
In addition, consideration payable upon the agreement of Completion Accounts ("Deferred Consideration") of up to £1,050,000 will be satisfied by the issue of up to 20,336,480 Avacta shares ("Deferred Consideration Shares") and up to approximately £440,000 of Convertible Loan Notes convertible into 14,663,520 Avacta Shares.
The Convertible Loan Notes can be converted into Avacta Shares at the request of either the Company or the holder at any time subject to certain limited exceptions. The Convertible Loan Notes are non-interest bearing and no coupon is payable. It is the Company's intention that the Convertible Loan Notes will be converted into Avacta Shares at the earliest practical opportunity.
Application will be made for the Initial Consideration Shares to be admitted to trading on AIM, which is expected to take place on 21 January 2009. Application will be made for the balance of the Deferred Consideration Shares to be admitted to trading on AIM upon finalisation of the completion accounts.
Theragenetics is a personalised medicine diagnostics company which is developing tests to improve the treatment of patients with central nervous system ("CNS") disorders such as schizophrenia and depression. This Acquisition follows the announcement by the Company on 9 January 2009 of the proposed acquisition of Curidium Medica plc ("Curidium") which, similarly, operates in the field of CNS personalised medicine whilst employing complimentary, non-conflictive science and technology.
A principal objective of personalised medicine is to identify which patients will respond more effectively to any given drug treatment. In this way the most appropriate drugs can be administered leading to improved patient outcomes. Drugs that previously may not have been taken to market by pharmaceutical companies because they were not effective for the majority of patients can then be commercialised for use with specific patient sub-groups. Mental illness, for example, represents an area that would benefit greatly from personalised medicine both in terms of diagnostics and treatment.
Part of Avacta's strategy is to develop and apply its proprietary analytical skills and technology towards the need for rapid identification and diagnosis at the molecular level, whether in healthcare, pharmaceutical development or in other industrial field applications. The acquisitions of Theragenetics and Curidium will consolidate strong IP positions in CNS personalised medicine tests and combined with Avacta's own commercialisation skills should help to provide important new technology and services to the healthcare sector.
Theragenetics operating loss for the nine months ended 31 December 2008 as extracted from the management accounts was approximately £1,182,000 (unaudited for the year ended 31 March 2008: approximately £934,000). At 31 December 2008 as extracted from the management accounts, Theragenetics net assets were approximately £975,000 (unaudited for the year ended 31 March 2008: approximately £2,157,000) and had net cash of approximately £1,148,000 (unaudited for the year ended 31 March 2008: approximately £2,471,000).
As the vendors of Theragenetics include IP Group PLC ("IP Group") which, through its subsidiary company, Techtran Group Limited, is a substantial shareholder of Avacta, the acquisition is classified as a related party transaction under the AIM Rules. With the exception of Alan Aubrey, who is a director of Avacta and of IP Group, the directors of Avacta consider, having consulted with Daniel Stewart & Company plc, the Company's nominated adviser and joint broker, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.
Alastair Smith, Chief Executive Officer, Avacta, commented:
"This is an opportunity for Avacta to develop further its business in the diagnostics sector. The anticipated integration of Theragenetics and Curidium within the enlarged group will create a strong intellectual property position in CNS personalised medicine that has the potential to be a significant asset to the Group."
15 January 2009Enquiries:Avacta Group plc Tel: 0870 835 4367 Alastair Smith, Chief Executive Officer Tim Sykes, Chief Financial Officer www.avacta.com Daniel Stewart & Company plc Tel: 020 7776 6550 Lindsay Mair/Charlotte Stranner www.danielstewart.co.uk Novum Securities Limited Tel: 020 7562 4700 Henry Turcan Haggie Financial LLP Tel: 020 7417 8989 Nicholas Nelson/Kathy Boate Nicholas.nelson@haggie.co.uk Notes to Editors:
In accordance with Rule 2.10 of the City Code, Avacta confirms that it has 843,560,824 ordinary shares of 0.1 pence each in issue and admitted (or pending admission) to trading on the AIM Market of the London Stock Exchange's under the UK ISIN Code GB0033519546.
Daniel Stewart & Company plc, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Avacta and no one else in connection with the Acquisition and will not be responsible to anyone other than Avacta for providing the protections afforded to clients of Daniel Stewart & Company plc nor for providing advice in relation to the Acquisition or any other matter referred to herein.
Novum Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Avacta and is acting for no one else in connection with the Acquisition and will not be responsible to anyone other than Avacta for providing the protections afforded to clients of Novum Securities Limited or for providing advice in relation to the Acquisition or any other matter referred to herein.
Dealing Disclosure Requirements:
Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the "Code"), if any person is, or becomes, "interested" (directly or indirectly) in 1% or more of any class of "relevant securities" of the Company, all "dealings" in any "relevant securities" of that company (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of the Company, they will be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant securities" of the Company by the Company, or by any of its respective "associates", must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8, you should consult the Panel.
About Avacta:
Avacta was spun-out from the University of Leeds in 2004 by its current management team as a biophysics company, with the aim of combining the disciplines of physics and biology to develop innovative technologies and expert technical services to address needs in the pharmaceutical, defence and clinical diagnostics markets. Avacta has a core bio-analytical technology development programme addressing the needs of the biopharmaceutical sector to fully characterise their new products at the earliest stage in their development to reduce the risk of late stage failure. High value solutions in clinical diagnostics are also being targeted for these core bio-analytical technologies and for Avacta's trace gas analysis technology as well as opportunities in industrial and military sensing applications.
A successful and growing part of the Avacta business model is its technical services arm, Avacta Analytical Limited, which is focused on providing leading edge contract research to the biopharmaceutical and healthcare/personal-care materials sectors. Avacta listed on AIM in August 2006 through the reverse takeover of Readybuy plc which changed its name to Avacta Group plc.
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