Deltex Medical Regulatory News (DEMG)

22 Jun 2007 07:01

Deltex Medical Group PLC22 June 2007 Deltex Medical Group plc Placing of 8,290,029 New Ordinary Shares at 23 pence to raise approximately £1.91 million 22 June 2007 Deltex Medical Group plc ('Deltex Medical' or the 'Company'), theUK's leading haemodynamic monitoring company, today announces that CharlesStanley Securities has, on behalf of the Company, placed 8,290,029 new ordinaryshares of 1 pence each ("New Ordinary Shares") at a price of 23 pence, to raiseapproximately £1.91 million before expenses (the "Placing"). The Company will use the proceeds to significantly expand its manufacturingcapability in response to sales growth of its CardioQ(TM)products in each of itskey markets and to augment working capital. In particular the Company plans tomore than double the maximum production capacity of its existing factory,automate certain key manufacturing processes relating to production of itsdisposable probes, implement new best practice business continuity plans and tofurther develop the CardioQ monitor to improve and upgrade its componentry andfunctionality. In addition, the Company is strengthening further itsintellectual property by broadening the scope of patents. Implementation of the Company's plans to expand its manufacturing capacityfollows the announcement on 5 June 2007 confirming national coverage forreimbursement by the Centers for Medicare and Medicaid Services in the USA witheffect from 22 May 2007. Deltex Medical's chairman, Nigel Keen, commented: "Deltex Medical has reached a key stage in its development where it isexperiencing both sustained and sustainable growth in all of its key markets.Furthermore the Company's potential for future growth has been enhancedsignificantly by the recent announcement of reimbursement coverage in the USA.This investment in the expansion of our manufacturing capacity will allow us tomeet the rising demand for our products." Placing details Charles Stanley has agreed to use its reasonable endeavours to place 8,290,029New Ordinary Shares on behalf of the Company with institutional and otherinvestors. The Placing is conditional, inter alia, upon Admission and isintended to raise approximately £1.91 million, before expenses. Application will be made for the New Ordinary Shares issued pursuant to thePlacing to be admitted to trading on AIM and it is anticipated that Admissionwill become effective and that dealings will commence on Wednesday 27 June 2007. The Placing is not a rights issue or open offer and New Ordinary Shares will notbe offered generally to Shareholders, whether on a pre-emptive basis orotherwise. The Directors believe that the considerable extra cost and delayinvolved in a rights issue or open offer would not be in the best interests ofthe Company in the circumstances. The Placing Shares will represent approximately 8.97 per cent. of the entireissued share capital of the Company immediately following Admission. Followingthe Placing the Company will have 92,398,470 ordinary shares in issue. Thisfigure may be used by shareholders as the denominator for the calculations bywhich they will determine if they are required to notify their interest in, or achange to their interest in Deltex Medical Group plc, under the Disclosure andTransparency Rules. The Placing Shares will, when issued, rank equally in allrespects with the existing ordinary shares. Summary of the Placing Agreement The Company has today entered into a placing agreement with Charles Stanley (the"Placing Agreement"). The obligations of Charles Stanley under the PlacingAgreement are conditional upon certain conditions having being fulfilled (orwaived), including, inter alia, Admission. The agreement contains certainrepresentations and warranties by the Company as to the accuracy of theinformation contained in this announcement and other matters relating to theCompany and its business which are usual for an agreement of this nature. The Company has agreed to indemnify Charles Stanley against all losses, costs,charges and expenses which Charles Stanley may suffer or incur as a result ofcarrying out its duties under the Placing Agreement, save to the extent the samearise by virtue of the fraud, negligence or wilful default of Charles Stanley. Charles Stanley has certain rights, at any time prior to Admission, to terminatetheir obligations under the Placing Agreement in certain limited circumstances.Such circumstances include, inter alia, material breach by the Company of theterms of the Placing Agreement or any warranty therein being or becoming untrue,inaccurate or misleading in any material respect. For further information, please contact:- Deltex Medical Group plc 01243 774 837Nigel Keen, Chairman njk@deltexmedical.comAndy Hill, Chief Executive ahill@deltexmedical.comEwan Phillips, Finance Director eap@deltexmedical.com Gavin Anderson & Company 0207 554 1400Deborah Walter dwalter@gavinanderson.co.ukRobert Speed rspeed@gavinanderson.co.uk Charles Stanley Securities 020 7149 6457Philip Davies philip.davies@csysecurities.com Notes for Editors Deltex Medical manufactures and markets the CardioQ monitor, which usesdisposable ultra-sound probes inserted into the oesophagus to determine theamount of blood being pumped around the body - 'circulating blood volume'.Reduced circulating blood volume is known as hypovolaemia, which leads toinsufficient oxygen being delivered to the organs. This causes medicalcomplications including peripheral and major organ failure which can lead todeath. Hypovolaemia, which is akin to severe dehydration, affects virtuallyevery patient having surgery because of the combined effects of pre-operativestarvation, the impact of the anaesthetic agents and trauma from the surgeryitself. Using fluids and drugs, guided by the CardioQ, to optimise the amount ofcirculating blood significantly reduces post-operative complications allowingpatients to make a faster, more complete recovery and return home earlier. The CardioQ incorporates the Company's proprietary software and a smalldiameter, easy-to-use, minimally invasive, disposable oesophageal probe that isused for transmitting and receiving an ultra-sound signal. By using thistechnology, the CardioQ provides clinicians with the ability to haemodynamicallyoptimise critically ill patients and those undergoing routine moderate to majorsurgery through the controlled administration of fluid and drugs. Haemodynamicoptimisation has been scientifically proven to improve the speed and quality ofpatient recovery and reduce hospital stay. There are already over 1,250 CardioQs currently in use in hospitals worldwideand distribution arrangements are in place in over 30 countries. In addition,there are currently more than 90 clinical publications on the use of the CardioQwhich have repeatedly:- • Validated the results of the Monitor against known standards for measuring cardiac output, demonstrating that the technology works • Proved that the CardioQ works in a wide range of surgical procedures • Demonstrated that the Company's technology provides significant health and economic benefits by helping to reduce post-operative complications and length of hospital stays by an average of 30 to 40 per cent for a wide range of patients. The SupraQ is an entirely non-invasive device which uses an ultrasound probeheld at the base of the patient's neck to track the flow of blood in the aorta;it presents the same data as the CardioQ in a similar format and is used fortaking snapshots or monitoring over short periods. This information is provided by RNS The company news service from the London Stock Exchange