On the 26th of August Anteo Diagnostics announced their intent to acquire Belgium based diagnostics company DIASOURCE.
Highlights of the acquisition from the ASX release are below :
- Anteo Diagnostics to acquire 100% of the equity in global specialty diagnostics company,
- DIAsource ImmunoAssays SA (Belgium), in line with previously announced acquisitivegrowth strategy
- DIAsource ImmunoAssays generated revenue of €11.9m (A$18.0m) in 2014, and €7.2m(A$10.9m) in first half of 2015 (25% growth) with quarterly EBITDA margins of 20%
- Purchase price of €15.4m (A$23.3m), with a two year earn out to vendors, subject toachievement of financial business targets
- Transformational acquisition to transition Anteo towards a cash flow positive business,with an established global distribution platform, manufacturing capabilities and a significantly broadened product range
- Deal completion subject to financing and regulatory approvals
- New merged business entity of 100 personnel
Details of funding is yet to be presented and that is why I haven't posted about the acquisition itself in more detail until more information surfaces.
What I do want to put together in this post is just some basic information relating to the information as a resource to come back to and expand from at a later stage.
Below is the ASX Announcement :
On the same day Anteo CEO Dr Geoff Cumming presented to Boardroom Radio :
A FEW THOUGHTS.....
- Firstly the initial strategy of accelerating growth by acquisition is a strategy I like - Of course depending on details of financing etc - But that aside for a moment it is fairly clear that larger companies working with Anteo have shown commercial interest in Anteo and their technology and the time had come for Anteo to either give away margin and use contract manufacturers or get a bigger slice of the pie and gain more control over the manufacturing process and develop a global footprint.
- A couple of things I have been looking at over the past couple of years - Firstly was the Vitamin D market - We know Anteo was working with the major player in this field DIASORIN (No not DIASOURCE - so don't get confused here) - Now lets follow the breadcrumbs - Josh Soldo was at Diasorin and is now working for Anteo Diagnostics - Josh has a lot of experience in the VITAMIN D world and has even worked on patents around VITAMIN D.
- Now the part of Diasource's business I find interesting is the recent growth they have achieved and as we are yet to see any recent financials it would be interesting to see what impact Diasource's VITAMIN D tests have had towards this recent revenue increase?
- There are also some interesting connections between FUTURE DIAGNOSTICS who develop the VITAMIN D assay for DIASOURCE and FUTURE DX also were working with PHILIPS HANDHELD DIAGNOSTICS on the MAGNOTECH/MINICARE device....
- As far as the funding goes - There are many things going through my head but until we here anything concrete it really is just speculation - But for fun.... Is there a partner Anteo is working with that wants a stake in the company and this would help fund the acquisition?
- Time frame as indicated was for November so should be an interesting month or two ahead and no doubt a busy time for the company.
Below is a video presentation from DIASOURCE on the VITAMIN D testing :
So just a fairly brief post but just wanted to get some information together.
The big one is the discussion that this acquisition has the potential to make the whole Anteo operating company cash flow positive.
We await more news......
DISCLOSURE : THE AUTHOR HOLDS SHARES IN THIS COMPANY. THIS RESEARCH IS NOT A RECOMMENDATION TO BUY OR SELL SHARES IN THIS COMPANY. THE AUTHOR MAY AT ANY TIME BUY OR SELL SHARES WITHOUT NOTICE. PLEASE DO YOUR OWN RESEARCH