Deltex Medical Regulatory News (DEMG)

18 Apr 2008 07:00

Deltex Medical Group PLC18 April 2008 Deltex Medical Group plc £2 million funding package agreed for expansion of US and German operations 18 April 2008 - Deltex Medical Group plc ("Deltex Medical" or the "Company"),the UK's leading haemodynamic monitoring company, today announces that it hassecured £2.0 million of new finance to fund expansion of its sales and marketingoperations in the USA and Germany. Deltex Medical announced its preliminary results for the year ended 31 December2007 on 7 April 2008 and stated that it had accepted an irrevocable undertakingfrom Nexus Medical Partners II, LP ('Nexus') to subscribe for 3,030,303 ordinaryshares of 1p each at a price of 22.0p per share. Since then the Company hascontinued its discussions both with Nexus and with Medicis Capital Partners GmbH('Medicis'), a German affiliate of Nexus. As a result the Company has acceptedfurther irrevocable undertakings from Nexus to subscribe for an additional336,701 new ordinary shares of 1p each at 22.0p per share (increasing theirtotal subscription to 3,367,004 shares) and from Medicis to subscribe for3,469,388 new ordinary shares of 1p each at 24.5 p per share. These undertakings to subscribe for a total of 6,836,392 new ordinary shares of1p each (the "New Ordinary Shares") at 22.0p and 24.5p to raise £1,590,741before expenses are subject to approval by shareholders at the Company'sforthcoming Annual General Meeting and assumes no material adverse changes inthe Company's business prior to the new ordinary shares being issued. Ed Snape,a non-executive director of Deltex Medical, is also a principal of Nexus MedicalPartners. The New Ordinary Shares will rank pari passu with the existing issued shares ofthe Company. Following the issue of the New Ordinary Shares the Company willhave a total of 99,738,045 ordinary shares in issue. This total includes anallotment of 413,746 new ordinary shares which are also subject to approval atthe next general meeting of the Company as announced on 25 January 2008.Application has been made for these shares to be admitted to trading on AIM anddealings are expected to commence on 14 May 2008. In addition to their investment in New Ordinary Shares, Nexus has agreed to lendapproximately £259,259 to the Company's US subsidiary by way of an unsecuredloan note repayable after five years. Interest on the loan note is to be chargedat 4% per annum with all interest rolling up for settlement on redemption. In addition to their investment in New Ordinary Shares, Medicis has agreed tolend approximately £150,000 to the Company's German subsidiary by way of anunsecured loan note repayable after five years. Interest on the loan note is tobe charged at 6% per annum with all interest rolling up for settlement onredemption. The unsecured loan from Nexus will be denominated in US dollars, with the loanfrom Medicis in Euros and the exact amounts will be such that Nexus's total newinvestment in Deltex Medical will be $2,000,000 and Medicis's €1,250,000 on thedate of investment. The total funds from Nexus and Medicis to be invested are specifically for usein expanding the US and German markets respectively, including the hiring ofadditional management and field staff in key locations to manage and support thegrowing demand for the Company's products. The US funds are managed by Nexus onbehalf of a US State Government to promote economic development. Deltex Medical's Chief Executive, Andy Hill commented: "The USA and Germany are two of the largest potential markets for the CardioQand we have established solid bases in each of them over the last few years.This new funding package is on terms designed to attract us to develop our USand German operations and allows us to push forward more quickly with ourfocused expansion plans." 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 1400 Deborah Walter dwalter@gavinanderson.co.ukRobert Speed rspeed@gavinanderson.co.ukStuart Macaulay smacaulay@gavinanderson.co.uk Charles Stanley Securities 020 7149 6000(Nominated Adviser)Philip Davies philip.davies@csysecurities.comRussell Cook russell.cook@csysecurities.com Notes for Editors Deltex Medical manufactures and markets the CardioQ(TM) 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 around 1,500 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(TM) 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