EKF Diagnostics, the point of care diagnostics company, announced a major acquisition and distribution agreement in the US alongside its preliminary results to 31st December 2010.
EKF has agreed to acquire Stanbio Laboratory L.P. for an initial consideration of $19.5 million, comprising $14 million in cash and the balance in shares. The deal also includes performance based deferred consideration of up to $6 million. This will be funded by a £13 million placing at 20p per share in exchange for shares representing 26% of the enlarged share capital.
Stanbio is a US based medical diagnostic devices distribution and manufacturing business. Its product range includes EKF's Hemo_Control device - its direct customers include Roche Diagnostics Corporation, Ortho Clinical Diagnostics, Cardinal Health Inc, Fisher Healthcare Inc and Sekisui Diagnostics LLC (formerly Genzyme Diagnostics). The company also sells through an extensive North and South American distributor network. For the year to December 2010, Stanbio achieved of sales of $16.3 million (2009: $15.2 million), adjusted EBITDA of $3.1 million (2009: $1.5 million) and pre-tax profit of $2.4 million (2009: $983,000).
In a related deal, Alere Inc has been appointed exclusive distributor of EKF's CLIA waived Hemo_Control device and cuvettes in the US, Canada and the UK. The agreement is for an initial term of three years, and includes minimum sales levels designed to enable EKF to rapidly expand into an existing customer base. The agreement provides access to a large direct sales force in the US, and should enable EKF to significantly grow market share in the US haemoglobin testing market.
The final results to December 2010 showed sales of £6.5 million (2009: £nil), adjusted EBITDA of £804,000 (2009: £(386,000)) and pre-tax loss of £2.1 million (2009: £(568,000)) - the results include an exceptional charge of £1.9 million (2009: £207,000 charge). The company reported that year end net cash was £2.7 million
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