EKF - Preliminary results, major acquisition and exclusive distribution agreement

Tuesday, May 24 2011 by

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


This note was prepared by LCF Research Limited using information provided by the subject company’s management or publically available news sources. No representations are made nor warranties given (express or implied) in relation to accuracy and completeness. This document is not an invitation to invest in the subject company and does not purport to contain all the necessary information that a prospective investor might require. LCF Research Limited recommends prospective investors to conduct their own thorough independent analysis of the subject company and the information contained in this note or referred to above.

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EKF Diagnostics Holdings plc is engaged in developing, manufacturing and supplying of products and services into the in-vitro diagnostic (IVD) market place. The Company manufactures and sells diagnostic instruments, reagents and certain ancillary products. The Company's point-of-care range includes hemoglobin analyzers, HbA1c analyzers and glucose analyzers for use in the screening, monitoring and diagnosis of patients, as well as rapid tests for pregnancy and common infectious diseases. The Company's Central Laboratory division includes a range of products for use in both large and small laboratory facilities. Its subsidiary, EKF Life Sciences, provides bulk diagnostic enzyme manufacturing and fermentation services. EKF Life Sciences specializes in producing enzymes, including Salicylate Hydroxylase and Beta-Hydroxybutyrate Dehydrogenase. Its products include Quo-Test A1c, Biosen C-Line and Biosen S-Line, STAT-Site M B-HB analyzer, sTNFR1 biomarker test kits and Altair 240. more »

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