BIOCODE HYCEL BRITISH
[BIZ/LIFE-SCI: Liège, August 3] Immunodiagnostic Systems Holdings PLC ("IDS" or “the Company”), a leading producer of diagnostic testing kits, announced that it has entered into a conditional agreement to acquire 99.93% of Biocode Hycel S.A. (“Biocode Hycel”), a Belgian-French group that develops, manufactures and distributes IVD instruments and reagents. The company intends to raise GBP 12m before expenses (GBP 11.25m net) by a placement of five million new ordinary shares at 240p per share (the “Placing”) by Teather & Greenwood Limited, Nominated Advisor and Broker to IDS, to fund the acquisition of Biocode Hycel and for working capital. Information on Biocode Group Biocode Hycel develops, manufactures and distributes IVD instruments and reagents for immunoassay, hematology and biochemistry. Biocode has four sites, namely Liège (Belgium) and Massy, Rennes and Pouilly (France), and currently employs 132 people. IDS announced on December 4, 2006 that it had reached an exclusive agreement with Biocode Hycel S.A., who were then in the final stages of developing a new generation of automation instrument, called the 3X3, to automate its complete range of bone & skeletal products on the 3X3. In doing so, IDS became a founder member of the 3X3 Alliance that has been created to simultaneously develop tests for this new platform. For the year ending 31 December 2006, Biocode Hycel made a negative EBIT of EUR 2.77m (c. GBP 1.85m), on a turnover of EUR 12.10m (c. GBP 8.07m). As at 31 December 2006 Biocode Hycel’s net assets under Belgian GAAP were EUR 7.33m (c. GBP 4.89m). Biocode Hycel’s EUR 12m sales are achieved primarily in France and a number of relatively minor IVD market territories. IDS is strong in the major IVD markets, with direct subsidiaries in the prime markets of the USA, Germany, France and the UK, and active distributors in Italy, Spain, Japan and Australia, amongst others. The Directors are confident that offering Biocode Hycel’s existing products in these markets can significantly raise the level of sales of the expanded group Consideration and Placing IDS has agreed to pay the Vendors EUR 23m, with EUR 11m to be satisfied in cash and EUR 12m by the issue of the Vendor Shares, less any net debt as defined by the acquisition agreement. In addition, IDS has agreed to pay the Vendors Earnout Royalties of EUR 10,000 for each new 3X3 Instrument sold, rented out or placed by the Biocode Group in the period from completion of the Biocode Acquisition to December 31, 2010, and EUR 5,000 for each new 3X3 instrument sold to third party companies under Original Equipment Manufacturer contracts until December 31, 2012. The Placing is intended to raise GBP 12m gross (GBP 11.25m net) with c. GBP 7.4m to fund the cash element of the Initial Consideration and GBP 3.85m to provide additional working capital. While the Vendors Earnout Royalties will provide additional consideration to the Vendors, the Directors are confident that the terms will also deliver acceptable margins to IDS, with incremental contributions from long-term onward sales of bespoke consumables such as plastic cuvettes and reagent modules generated by every placement. It is proposed that Alain Rousseau, the current CEO of Biocode Hycel and the co-inventor of 3X3 instrument, be appointed to the Board of the Company as Engineering Director on completion of the acquisition. In addition Mr. Rousseau will remain an employee of the Biocode Hycel on an undetermined-term contract with a 6 month notice period and a total annual remuneration of approximately EUR 198,000 (GBP 134,000). The acquisition of Biocode Hycel and the Placing are both conditional upon, among other things, the approval of IDS shareholders of a resolution to be proposed at an Extraordinary General Meeting, which will be held at 10 Didcot Way, Boldon Business Park, Boldon, Tyne & Wear NE35 9PD at 11.00 a.m. on August 28, 2007. The Directors unanimously recommend that all Shareholders vote in favor of the resolution, as they intend to so in respect of their own beneficial holdings representing 23.02% of the Company. Managing Director, Dr Roger Duggan, commented “On 26 July IDS announced that it had completed the acquisition of Nordic Bioscience Diagnostics A/S (NBD), the Danish based producer of diagnostic testing kits, for GBP 17m with GBP 10m (EUR 14.9m) to be satisfied in cash, and the balance satisfied through the issue of 2,783,300 new Ordinary Shares in IDS, at a price of 251.5p. This acquisition adds sales in excess of GBP 4m per annum to existing IDS sales (GBP 9.9m), with an EBIT of greater than GBP 2m, in highly complementary bone & skeletal products with a strong IP portfolio. It also creates “IDS Scandinavia” (to be known as IDS Nordic) providing for increased margins on sales of NBD products through the IDS Group in the USA and Europe, and of IDS product sales throughout Scandinavia. Both the acquisition of NBD, and the acquisition of Biocode Hycel that we are announcing today, are strategically sound in their own right, and whilst not linked in any way other than temporally, are exquisitely incremental. The Acquisition of NBD delivers unique, patent-protected products that fill gaps in our existing product range to create a panel of tests exceeding that of any of our competitors. The acquisition of Biocode Hycel facilitates the exploitation of the 3X3 by IDS and Alliance members, and empowers IDS to invite selected non-competing companies with the same quality ethic, and with expertise in the fields of not only immunoassay, but also hematology and biochemistry, to become new members. Our goal of becoming the world leader in automated bone & skeletal biomarkers is both enhanced and protected by these serial acquisitions, and we are confident that we can fill this important and expanding niche market. Elevated margins on existing IDS and NBD product sales in direct territories, falling straight to the bottom line, is simply the icing on the cake” A circular, containing further information on the proposed acquisition of Biocode Hycel and on the Placing, and which contains a notice of EGM, and a form of proxy will be posted to shareholders today.
The Liège biotech company Biocode Hycel has been taken over by the British diagnostic group Immunodiagnostic Systems for GPB 23m. Last year Biocode Hycel was intending to raise EUR 10m on the markets in Brussels and Paris to commercialize its computerized blood analysis systems. This year Biocode Hycel has signed an agreement to develop the platform further. Biocode Hycel employs 100 in France and 30 in Belgium.
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