Acquisition update

6 Jun 2006 07:01

Tristel PLC06 June 2006 Tristel plc Acquisition of Vernagene Limited completed Tristel plc ("Tristel"), the healthcare business which uses its proprietarychlorine dioxide chemistry to create infection control products for hospitals,announces that it has completed the acquisition of Vernagene Limited ("Vernagene"), the chlorine dioxide specialist focusing on the water treatment and food processing industries, for £1m. It was announced on 23 May 2006 that Tristel had exchanged contracts for theacquisition of Vernagene, an acquisition that will be immediately earningsenhancing. Vernagene, which is based in Bolton, focuses on water treatment and purificationand hygiene control within the food processing industry. It has been divested byVerna Group Holdings Limited. Vernagene employs six people and in the year ended 31 March 2006 achieved salesof £1,177,000 (2005: £1,145,000 and 2004: £906,000) and pre-tax profits of£301,000. As at 31 March 2006, Vernagene had net assets of £289,000. Tristel haspurchased the share capital of the company for £1m in cash and may pay anadditional sum of up to £100,000 on an earn-out basis. The acquisition will befunded using existing cash resources (i.e. surplus cash from flotation andoperations) and a short term loan of £200,000 from one of its shareholders. TheCompany intends to refinance this loan with commercial bank term debt. CurrentlyTristel has no debt. The acquisition will extend Tristel's reach beyond the infection control marketin hospitals, where it has focused its activities to date, enabling it to expandinto new markets where chlorine dioxide is increasingly being used. Vernagenehas approximately 200 customers in the government, municipal, industrial,healthcare and food sectors. Importantly, Vernagene provides water treatmentsolutions to approximately 40 UK hospitals, where its products are used forLegionella control, whilst Tristel supplies approximately 400 hospitals with itsinstrument and surface disinfection products. The Board believes there will besignificant cross selling opportunities. The acquisition will also present an opportunity for Tristel to apply its salesand marketing skills to the Vernagene product offering as well as theopportunity to combine Tristel's patented technology and unique delivery systemswith Vernagene's chlorine dioxide chemistry. ENDS Tristel plc Parkgreen Communications LtdPaul Swinney, Chief Executive Paul McManus Paul Barnes, Finance Director (paul.mcmanus@binnspr.co.uk)Tel: 01638 721 500 Tel 020 7786 9600http://www.tristel.com Mob: 07980 541 893 This information is provided by RNS The company news service from the London Stock Exchange