REG - BATM Advanced Comm - Sale of Diagnostics Distributor

Batm Advanced CommunicationsAnnouncement

06/10/2025 07:00

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RNS Number : 1649C  BATM Advanced Communications Ld  06 October 2025

LEI: 213800FLQUB9J289RU66

6 October 2025

 

BATM Advanced Communications Limited

("BATM" or "the Group")

 

Sale of Diagnostics Distributor

 

BATM (LSE: BVC; TASE: BVC), a global provider of advanced network
infrastructure, cybersecurity and diagnostic technologies, is pleased to
announce that it has entered into an agreement (the "Sale Agreement") to sell
A.M.S 2000 Trading Impex SRL ("AMS"), a subsidiary of the Group that
distributes diagnostic laboratory equipment in Romania. The Sale Agreement
marks a key milestone in the execution of the Group's strategy to exit its
non-core activities and focus on its core strengths of networks, cybersecurity
and diagnostics.

 

Under the terms of the Sale Agreement, the Group will sell AMS to Dr. Zvi
Marom, a non-executive director and significant shareholder of the Group, in
exchange for his entire shareholding of 96,794,500 ordinary shares of NIS 0.01
each ("Ordinary Shares") in BATM, representing c. 22.2% of the existing issued
share capital. The transaction values AMS at £17.6m (c. $23.7m), based on the
closing price of the Group's Ordinary Shares on the Main Market of the London
Stock Exchange on 3 October 2025, being the trading day prior to the signing
of the Sale Agreement. Dr. Marom's offer exceeded the value of a competing
offer that the Group received for the disposal of AMS.

 

The completion of the sale is subject to the approval of shareholders at a
general meeting; the Board will issue a circular to convene this general
meeting in due course. Following completion, Dr. Marom will cease to be a
shareholder of the Group and will resign as a director of the Group.

 

Moti Nagar, Chief Executive Officer of BATM, said:

 

"This transaction marks a significant step in BATM's strategic execution,
underlining our focus on becoming a streamlined, high-growth business. The
sale of AMS is the fourth sale of a non-core asset in 2025, reflecting our
commitment to focus resources and efforts on our core markets of networks,
cybersecurity and diagnostics, that offer substantial growth opportunities and
where we are making strong advancements, particularly in network encryption
and edge computing. The Board believes this transaction is compelling not only
strategically, but also because it allows us to deliver immediate value to
shareholders. We continue to make progress with respect to exiting other
non-core assets and look forward to updating the market in due course."

 

Background to the transaction

 

Since June 2023, the Group has been executing on a clear strategy for the
business to focus on its core strengths of networks, cybersecurity and
diagnostics, and to dispose of all non-core assets. The Group is prioritising
its higher-margin activities that are in substantial, high-growth markets and
where it can leverage its decades of experience of delivering highly
innovative solutions. By disposing of its non-core assets, the Group will be
able to provide greater resources and focus to its identified core strengths
to drive growth in these activities where the Board believes greater
opportunities exist to maximise shareholder value.

 

AMS, which was established in 1997 and acquired by the Group in 2007, is an
authorised importer and distributor in the Romanian market of diagnostic
laboratory equipment, including reagents and laboratory supplies, from leading
international brands. It also has two laboratories that perform genetic,
microbiological, physio-chemical and environmental analyses, which will be
taken out of AMS prior to the sale. BATM will continue to own and operate the
two laboratories, which it will seek to sell as part of its ongoing strategy
to dispose of non-core assets. AMS has approximately 100 employees across
several offices, a warehouse and the laboratories in Romania. The proposed
sale will reduce the operational complexity of BATM and enable savings in
central corporate costs.

 

For the year ended 31 December 2024, AMS generated revenue of $34.2m, a gross
margin of 28% and net profit of $2.7m prior to any allocation of central
corporate costs. This includes the contribution from the laboratories, which
accounted for c. 11% of AMS revenue in 2024.

 

For the Group's reporting purposes, AMS was incorporated within the BATM
Diagnostics division as the business had begun to distribute the Group's
proprietary diagnostic products alongside third-party products. However, its
activities are non-core to the Group's high-margin, high-growth and
high-technology focus. Accordingly, the Board believes it is in the best
interests of the Group and its shareholders to dispose of AMS for the reasons
outlined above.

 

Terms of the transaction

 

Under the terms of the Sale Agreement, the Group will sell AMS (excluding the
laboratories) to Dr. Marom for £17.6m. The consideration will be satisfied by
the exchange of his entire shareholding in the BATM (the "Consideration
Shares"). Dr. Marom holds a total of 96,794,500 Ordinary Shares in BATM,
representing c. 22.2% of the Group's issued share capital. BATM will retain
any cash balances that will be outstanding in AMS prior to the sale, after
adjustments to normative working capital in AMS.

 

BATM is the ultimate parent company of AMS, through the Group's 100% indirect
ownership of Sunstring Ltd, which wholly owns AMS.

 

The completion of the transaction is subject to shareholder approval at a
general meeting and all other legal and regulatory requirements.

 

Resultant holdings, total voting rights and Rule 9 waiver

 

Under the terms of the Sale Agreement, the Consideration Shares will be held
by Sunstring Ltd. )or with another company in the Group, at BATM's
discretion(. In accordance with Israeli law, due to the Consideration Shares
being held by a subsidiary of the Group, they would not have any voting
rights. As a result, on completion of the transaction, the total number of
Ordinary Shares with voting rights in BATM is expected to reduce to
339,887,169 Ordinary Shares. This would be the figure used by shareholders as
the denominator for the calculations by which they would determine if they are
required to notify their interest in, or a change to their interest in, the
share capital of the Group under the Financial Conduct Authority's Disclosure
Guidance and Transparency Rules.

 

The completion of the transaction, as outlined above, would result in Lombard
Odier holding over 30% of the voting rights of the Group. As a company
incorporated in Israel, the Group is not bound by the City Code on Takeovers
and Mergers (the "UK Takeover Code"). However, as per the Group's articles of
association (the "Articles"), the Group has chosen to voluntarily adopt the
principles of the UK Takeover Code, but, in accordance with the Articles, the
Board of Directors has full authority to determine its application.
Accordingly, the Board has resolved that Lombard Odier holding over 30% of the
voting rights of the Group to be a permitted acquisition under the terms of
the Articles and thus there would not be an obligation under the section of
the Articles that has adopted Rule 9 of the UK Takeover Code for Lombard Odier
to make a mandatory offer for BATM.

 

Related party transaction

 

By reason of Dr. Marom being a non-executive director and significant
shareholder of the Group, the transaction would constitute a related party
transaction under UK Listing Rule 8.2.1R. The Independent Directors of BATM,
having been so advised by Shore Capital, acting in their capacity as sponsor
to the Group, consider the terms of the transaction to be fair and reasonable
so far as the shareholders of the Group are concerned. The Independent
Directors also took into account a valuation report by an independent
consultancy that was commissioned by the Board, with the value of the
Consideration Shares being in line with the report's estimated value for AMS.
Dr. Marom did not participate in any of the Board deliberations concerning
this transaction and the transaction has been approved by the Group's Audit
Committee. In addition, and as noted above, the proposed transaction with Dr.
Marom represents the best offer that the Group received for the disposal of
AMS.

 

 

Enquiries

 

 BATM
 Moti Nagar, Chief Executive Officer                            +972 9866 2525
 Lior Miles, Chief Financial Officer

 Shore Capital
 Mark Percy, Anita Ghanekar, James Thomas (Corporate Advisory)  +44 20 7408 4050

 Gracechurch Group
 Harry Chathli, Claire Norbury                                  +44 20 4582 3500

 KK Advisory                                                    +44 20 7039 1901
 Kam Bansil, Steve Keeling

 

Forward-looking statements

This document contains forward-looking statements. Those statements reflect
the current opinions, evaluations and estimations of the Group's management,
and are based on the current data regarding the Group's business as is
detailed in this document and in the Group's periodical, interim and immediate
reports. The Group does not undertake any obligation or make any
representation that actual results and events will be in line with those
statements, and stresses that they may differ materially from those
statements, due to changes in the Group's business, market, competition,
demand for the Group's products or services, general economic factors or other
factors that can influence the Group's business and results, due to the risk
factors that are detailed in the Group's Annual Report, and due to information
and factors that are currently unknown to the Group's management and that, if
known, would affect the management's opinions, evaluations or estimations. The
Group will report the actual results and events according to its legal,
accounting and regulatory obligations, and does not undertake any other
obligation to report them or their deviations from the forward-looking
statements, or to update any of the forward-looking statements in this
document or to report that it is not valid anymore.

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