ODX.L Regulatory News (ODX)

3 Sep 2007 08:00

Omega Diagnostics Group PLC03 September 2007 Omega Diagnostics Group plc Completion of Acquisition Omega Diagnostics Group plc ("Omega"), the AIM listed medical diagnosticcompany, announces that it has completed the acquisition of the entire issuedshare capital of Genesis Diagnostics Limited and Cambridge Nutritional SciencesLimited (together "Genesis-CNS"). Genesis-CNS is a growing, profitable, cash-generative business serving theclinical and consumer diagnostics markets. Genesis-CNS supplies test kits tohospital laboratories in the UK and overseas, via a network of distributors, in27 countries. In addition Genesis-CNS offers food intolerance test services tohealthcare practitioners and has developed a home test kit for food intolerancewhich has received the CE mark and can be sold to consumers directly. Thecompany has also developed two complementary technologies, the macro- and themicroarray which it currently utilises in its own products and services. At the EGM on 30 August 2007 shareholders approved the completion of theAcquisition, the Placing, the Share Consolidation and the Capital Reorganisationand this morning the Second Admission Shares were admitted to trading on AIM.Further to the announcement on 30 August 2007 the Company's issued share capitalnow consists of 14,875,693 New Ordinary Shares of 4 pence each. Initial Consideration and Funding Initial consideration payable for the Acquisition was £5.7m and was payable asfollows: (a) £3.2 million payable in cash at Completion (approximately £2.9 million netof the cash on Genesis - CNS' balance sheet at Completion); (b) the issue of 4,461,220 Consideration Shares at the Placing Price and anamount in cash of £61,634 payable one year after Completion; and (c) the issue of a loan note in respect of £1.1 million on Completion. In order to fund the Acquisition the Company raised £2.2 million by means of aplacing of 7,333,333 New Ordinary Shares at 30p (0.75p before reorganisation andconsolidation) by Landsbanki Securities (UK) Limited. A further £1.2 million offunding for the Acquisition has been provided by a loan from Bank of Scotland. Omega Diagnostics Group PLC Landsbanki Securities (UK) Ltd Parkgreen Communications LtdAndrew Shepherd, Nominated Adviser & Broker Ben KnowlesChief ExecutiveKieron Harbinson, Thilo Hoffmann/Simon Brown Tel: 020 7479 7933Finance DirectorTel: 01259 763 030 Corporate Finance Mob: 07900 541 893 www.omegadiagnostics.com Tel: 020 7426 9000 ben.knowles@parkgreenmedia.com INFORMATION ON OMEGA Omega is an established business in the medical diagnostics industry whichproduces and sells a wide range of immunoassay and infectious disease IVD testkits and other products through a distribution network in more than 100countries worldwide. Omega operates in a niche market, supplying tests forspecific infectious diseases and other clinical conditions. The infectiousdiseases addressed by Omega's products include Syphilis, Tuberculosis, DengueFever, Chagas Disease and Malaria. All products are designed for use in clinicallaboratories and Rapid Tests are designed for use at the point of care. Omegacurrently exports over 95 per cent. of its products. INFORMATION ON GENESIS-CNS Genesis and CNS are established businesses in the medical diagnostics industrywhich develop, produce and sell a range of IVD tests kits specialising in theareas of autoimmune disease, infectious disease and food intolerance. Theacquisition of Genesis-CNS is in line with Omega's strategy of focusing onselected acquisitions of niche players in the IVD market. Genesis-CNS has thefollowing characteristics which make it an attractive acquisition for theCompany: - Growing, profitable, cash-generative- Operating in growth markets- Ability to increase the routes to market- Complementary product ranges- Well established high quality management team Growing, profitable, cash-generative: Over the three years to the year ended 31 October 2006 Genesis-CNS sales havegrown to approximately £2,192,000 (including intercompany sales of approximately£78,000) for the 2005/6 financial year. For the year ended 31 October 2006Genesis recorded a profit before tax of £238,103 and generated an operating cashsurplus of £259,117. As at 31 October 2006, Genesis had net assets of £885,204.For the year ended 31 October 2006 CNS recorded a profit before tax of £79,474and generated an operating cash surplus of £64,738. As at 31 October 2006, CNShad net assets of £121,414. Operating in growth markets: There has been a huge increase in people suffering from food related illnessesin recent years. Allergy UK, a national medical charity concerned withallergies, food intolerance and chemical sensitivities, believes that around 45per cent. of the UK population is adversely affected by the food they eat andthey see cases of food intolerance rising. The Directors believe that a growingawareness of food intolerance issues is driving the market potential fordiagnostic products and services and therefore will increase the potential forsales. It is estimated that the total European autoimmune disease diagnostics marketwas worth US$440 million in 2004 and it is predicted that it may reach almostUS$700 million by 2011. Ability to increase the routes to market: The Genesis-CNS distribution network only extends to 27 countries whereasOmega's extends to over 100 countries. The Directors intend to increase sales ofGenesis-CNS and Omega's products by cross-selling them into the combineddistribution network. Complementary product ranges: The products produced by Genesis-CNS utilise the Enzyme Immunoassay (EIA)technology which is common to many of the products produced by Omega and theyare highly complementary in that they cover areas of the IVD market which arenot currently covered by Omega. For example, Omega primarily sells infectiousdisease diagnostic products whereas Genesis-CNS focuses on autoimmunity and foodintolerance diagnostic products through its macro and microarray technologies. This information is provided by RNS The company news service from the London Stock Exchange