REG - Inspiration Health - Strategic acquisition of Airon Corporation

Inspiration HealthcareAnnouncement

04/01/2024 07:00

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RNS Number : 5890Y  Inspiration Healthcare Group PLC  04 January 2024

 

The information contained within this announcement is deemed by the Company to
constitute inside information stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as amended by the Market Abuse (Amendment) (EU Exit)
Regulations 2019. Upon the publication of this announcement via the Regulatory
Information Service, this inside information is now considered to be in the
public domain.

 

 

Inspiration Healthcare Group plc

("Inspiration Healthcare" or the "Company" or the "Group")

 

Launch of Inspiration Healthcare's USA platform through

strategic acquisition of Airon Corporation

Highlights

·    Provides an established platform to accelerate Inspiration
Healthcare's commercial strategy in the USA and the rest of North America

·    Adds a complementary portfolio of FDA cleared products

·    Acquisition expected to be earnings accretive in the second full year
of ownership

 

Inspiration Healthcare (AIM: IHC), the global medical technology company,
announces the acquisition of Airon Corporation ("Airon") a specialist
respiratory device company based in Florida, USA for a maximum consideration
of $2.5m. The consideration includes an initial upfront cash payment of $1.5m
plus an earn out of up to $1.0m dependent on the delivery of future revenues.

 

Overview of Airon

Airon is a leading manufacturer of specialist pneumatic oxygen-powered life
support ventilators, which have multiple uses including in Magnetic Resonance
Imaging (MRI) machines and transportation for neonates through to adults. The
company also sells a complementary range of continuous positive airway
pressure ("CPAP") devices, used in emergency medicine to support children and
adult patients. Airon has 15 employees, including sales, marketing and tech
support, and an established distribution network across the USA. In the year
to 30 April 2023, Airon generated total revenues of $1.4m, a loss before tax
of $0.4m and net assets of $1.3m.

 

Strategic rationale for the acquisition

The acquisition is in line with Inspiration Healthcare's long-term strategy to
acquire companies with both complementary technologies and sales reach to
expand the Group's global footprint, add scale and accelerate growth. The USA
is a significant strategic market for the Group and the acquisition provides
an established platform to support and de-risk the Company's commercial
strategy. It is expected to be earnings accretive in the second full year of
ownership.

 

In August 2023, Inspiration Healthcare submitted a 510K application to the FDA
for the SLE6000 neonatal ventilator which, pending approval, it aims to launch
in H2 FY2025. The acquisition of Airon provides an established platform for US
market entry for the SLE6000 and other products in the Company's portfolio,
enabling the Group to leverage Airon's established US presence, brand, and
reputation for high quality specialist products. The Group will also add the
Airon products to its portfolio to drive sales across its wider global
distribution network.

 

The benefits of the enlarged group include:

 

·    An established operation, in Melbourne, Florida with warehousing
facilities, proven systems and processes for the US market and access to key
neonatal units across the USA

·    A recognised brand and experienced sales team and distributor network
targeting the same customers

·    A portfolio of complementary FDA cleared products that will allow
further growth in the USA

·    Synergistic neonatal products that can be sold through the Group's
existing international sales channels

·    Support for the Group's commercial strategy in Canada

·    Expected to be earnings accretive from the second full financial year
of ownership

 

Terms of acquisition

Inspiration has acquired Airon for $1.5m cash paid at completion. An earn out
of up to $1.0m cash is payable based on Airon achieving certain net sales
targets in the 12 months to 30 April 2025.

 

The acquisition will be funded through the Company's existing resources.

 

Eric Gjerde, founder, President, and CEO of Airon will stay involved in the
company to help manage the transition whilst Inspiration Healthcare search for
a permanent new General Manager for the North American business as the Group
looks to invest in the business in the forthcoming years.

 

Neil Campbell, CEO of Inspiration Healthcare, commented: "The acquisition of
Airon is an important strategic milestone for Inspiration Healthcare. The
potential approval of the SLE6000 represents a significant commercial
opportunity and Airon gives the Group an established direct presence and
expertise in the USA, which will accelerate and de-risk our commercial
strategy. Airon also brings a range of complementary products, which will
further enhance our portfolio and enable us to increase sales in other
markets. I am delighted to welcome the Airon team to Inspiration Healthcare
and look forward to working together to provide lifesaving technologies to the
US market."

 

Eric Gjerde, founder, President, and CEO of Airon said: "I am excited that
Airon is joining Inspiration Healthcare.  The Group has a strong portfolio of
best-in-class products that will be of significant value to our customers. I
would like to thank our customers and staff for their continued support as
Airon embarks on the next part of its journey."

 

For further information:

 

 Inspiration Healthcare Group plc                                                Tel: +44 (0)330
                                                 175 0000
 Neil Campbell, Chief Executive Officer

 Alan Olby, Chief Financial Officer

 Liberum (Nominated Adviser & Broker)                                            Tel: +44 (0)20
                                                 3100 2000
 Phil Walker

 Richard Lindley

 Will King

 Walbrook PR Ltd (Media and Investor Relations)  Tel: +44 (0)20 7933 8780 or inspirationhealthcare@walbrookpr.com
 Anna Dunphy                                     Mob: +44 (0) 7876 741 001
 Stephanie Cuthbert                              Mob: +44 (0) 7796 794 663
 Louis Ashe-Jepson                               Mob: +44 (0) 7747 515 393

 

 

About Inspiration Healthcare

Inspiration Healthcare (AIM: IHC) designs, manufactures and markets pioneering
medical technology. Based in the UK, the Company specialises in neonatal
intensive care medical devices, which are addressing a critical need to help
to save the lives and improve the outcomes of patients, starting with the very
first breaths of life.

 

The Company has a broad portfolio of its own products and complementary
distributed products, for use in neonatal intensive care designed to support
even the most premature babies throughout their hospital stay. Its own branded
products range from highly sophisticated capital equipment such as ventilators
for life support through to single-use disposables.

 

The Company sells its products directly to hospitals and healthcare providers
in the UK and Ireland, where it also distributes a range of advanced medical
technologies for infusion therapy.  In the rest of the world the Company has
an established network of distribution partners around the world giving access
to more than 75 countries.

 

The Company operates from its world-class Manufacturing and Technology Centre
in Croydon, South London and from its facility in Hailsham, East Sussex.

 

Further information on Inspiration Healthcare can be found at
www.inspirationhealthcaregroup.com (http://www.inspirationhealthcaregroup.com)

 

About Airon

Established in 1997, Airon Corporation proudly manufactures products in
Melbourne, Florida and markets their innovative, reliable, effective, high
technology pneumatic oxygen-powered life support ventilation and CPAP products
and accessories throughout the world. Their products support neonates,
infants, paediatrics, children and adult patients in EMS, hospital ER and
trauma, MRI, OR, ICU and transport.

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