10 Dec 2014 07:00
Collagen Solutions Plc
(the "Company" or the "Group")
Southern Lights Biomaterials Acquisition Completed
Collagen Solutions plc (AIM: COS), the developer and manufacturer of medical grade collagen components for use in regenerative medicine, medical devices and in-vitro diagnostics, announces the completion of the acquisition of Southern Light Biomaterials ('SLB'), a profitable business converting collagen and other biological materials into value added products which are supplied to clients for further processing or by direct sales to customers.
The acquisition of SLB has further de-risked the Company's business model and is a logical strategic extension and complementary in nature to the Company's existing business model.
Benefits of the combined business:
· Profit added (EBITDA of £273,911 in year ended March 2014) |
· Increased IP and know-how around biomaterial development and manufacture |
· Secure raw material from registered BSE free sources |
· Focus on creating higher value formulations of collagen |
· Critical mass as a global supplier with increased geographic reach |
· Security of production and increased capacity via additional production site |
· Wider range of processed raw materials, e.g. pericardium |
· Combined international operations in North America, Europe and New Zealand |
· New regional strength in Asia |
· Turn-key solutions using biomaterials from "source to device" · Geoff Bennett joins Collagen Solutions board as Chief Business Officer |
Collagen Solutions and SLB have a complementary history, culture and strategy which makes the merger of the two businesses a logical move. The benefits of the merger include security of source material as SLB provides processed and semi processed bovine biomaterials, secured exclusively from New Zealand, a country the World Organisation for Animal Health describes as a 'negligible BSE risk' country.
SLB is based in the North Island of New Zealand, and benefits from being close to a readily available and consistent source of high quality and safe tissue. Like Collagen Solutions, SLB is a provider of processed and semi-processed biomaterials to medical device manufacturers and serves an increasing international client base with particular strengths in South Korea and other Asian countries where Collagen Solutions had no previous presence.
The acquisition gives the enlarged Group access to additional manufacturing capacity of medical grade collagen. With the combined expertise of the two companies and access to North America and Asia it would be expected that more value added products will be demanded, increasing the price per gram that can be charged by the enlarged Group.
Overall the Group now:
· Trades in Europe, North America and Asia |
· Benefits from a number of long term client arrangements |
· Has a product catalogue which includes various grades of medical collagen as well as a range of other biomaterials that will be offered to the expanded Group's customer base |
· Manufactures collagen products which are present in a range of registered products |
· Produces medical grade collagen which should be of increased interest to medical device manufacturers |
· Has increased capacity and capability to manufacture medical grade biomaterials · Is working on a number of development projects which will benefit from the newly formed Collagen Solutions Group, which the Directors believe will result in higher value added sales |
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Commenting on the first day of trading of the combined Group's shares, Dr Stewart White, CEO of Collagen Solutions said: "This is a very good acquisition for Collagen Solutions. The enlarged Group is well positioned to grow as the demand for medical grade collagen and collagen-based materials find increasing use in regenerative medicine and diagnostics. This represents a very significant step in completing the strategic aim of having a market capitalisation for the Group of £100m by 2020."
For additional information on Collagen Solutions, please visit www.collagensolutions.co.uk
Enquiries:
Collagen Solutions Plc |
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David Evans, Chairman | Tel: 07740 084 452 |
Stewart White, CEO | Tel: 0141 558 2008 |
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Zeus Capital (Nominated Adviser and Broker) |
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Ross Andrews / John Depasquale | Tel: 0161 831 1512 |
Alex Davies | Tel: 020 7533 7727 |
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Panmure Gordon & Co (Joint Broker) Robert Naylor (Corporate Finance) | Tel: 020 7886 2714Tel: 020 7886 2905 |
Maisie Atkinson (Corporate Broking) |
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Walbrook PR Ltd | Tel: 020 7933 8780 or collagen@walbrookpr.com |
Mike Wort | Mob: 07900 608 002 |
Anna Dunphy | Mob: 07876 741 001 |
Information on Southern Lights
Southern Lights was co-founded in 2003, by Geoffrey Bennett after BSE discoveries in US and Canada left a gap in the market for a New Zealand-based bovine supply chain for medical device manufacturers. It is based in the North Island of New Zealand, and benefits from the logistical advantage of being close to a readily available and consistent supply of source tissue from a country ranked by the World Organisation for Animal Health as a "negligible BSE risk" country. Southern Lights Biomaterials is a provider of processed and semi-processed biomaterials to medical device manufacturers, to an international client base. In addition, it provides consultancy services focusing on collagen, collagen related services and regulatory support to its customers.
Southern Lights' customers are medical device manufacturers. Its largest customer is based in South Korea and represented 63 per cent of total revenues for the year to 31 March 2014. It entered into a 5 year agreement with Southern Lights' in April 2011 for the supply of collagen and subsequently extended to 31 March 2018.
Its ISO 13485 certified production and engineering facility are based at Marton, New Zealand. This controlled environment facility includes, ISO Class 7 Clean Rooms, segregated processing areas, specific rooms for separate products to avoid cross contamination and a vacuum freeze drying facility. From these facilities Southern Lights currently supplies the following products:
· Processed biomaterials - mainly Type 1 Collagen, a 'rope-forming' collagen that can be found almost everywhere in the body, making it a logical choice for implantable tissue scaffolds;
· Preserved pericardium - a tough double layered membrane which covers and protects the heart from external shock, providing strength and extensibility and used for manufacturing the operational parts in bioprosthetic heart valves; and
· Semi-processed biomaterials - this primarily relates to pericardium and tendon, but to a lesser degree includes hide, bone, tendon, glands and blood vessels.
In addition, Southern Lights supports established and emerging medical device companies working to develop new or improved products for market. It can deliver engineered biomaterials with specific properties to companies focused on medical device product design, testing and approval.
Southern Lights manages the supply chain logistics for its customers in relation to delivery of product including transport logistics from Australasia to customer production facilities with associated export documentation and country-specific import documentation. It also provides regulatory support to assist its customers to meet the requirements for the use of animal products.