Tristel Regulatory News (TSTL)

TRISTEL plc

Termination of supply arrangement

Tristel plc ("Tristel"), the manufacturer of infection control, contamination control and hygiene products, announces that it has terminated its supply arrangement with Medichem International (Marketing) Limited ("Medichem") for disinfectants and cleaning products.

Tristel will now directly market these products to veterinary practices, hospitals and industry under Tristel related brands. Tristel has been Medichem's principal supplier following its acquisition of the intellectual property and manufacturing rights for these products in June 2009. Since then Tristel's annualised sales to Medichem have been approximately £2 million.

Tristel has manufactured the Medichem products over the last three years and owns the intellectual property rights for them. Its manufacturing plant will continue producing the products and it has the ISO accreditation for the manufacturing process and the CE marks that enable the products to be used. As a result, Tristel is well positioned to ensure continued supply to the marketplace, and the Directors believe that the enhanced margins achieved under direct supply arrangements should help offset the short term disruption caused by the termination of existing arrangements.

Following this termination, Tristel is now free to address the veterinary market directly and to broaden its product offering within areas that it had not been directly involved with, including its core hospital marketplace. Amongst the products that Tristel will now actively market are peracetic acid based instrument disinfectants and quaternary ammonium compound and biguanide based surface disinfectants.

The Directors estimate that the aggregate sales value of disinfectants supplied to the United Kingdom veterinary market is approximately £5 million. The products manufactured by Tristel account for approximately 60% of this total.

Commenting on the termination, Paul Swinney, Chief Executive of Tristel, stated, "The termination of this arrangement, whilst not planned, will give Tristel the opportunity to utilise its sales team in these new areas. Whilst there will undoubtedly be some short term disruption, we see this as a positive opportunity in the medium term and beyond."

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