MediCult Acquires US-Based MidAtlantic Diagnostics to Further Strengthen ART Presence

Friday, September 26, 2008 General News
Email Print This Page Comment bookmark
Font : A-A+

JYLLINGE, Denmark and MOUNT LAUREL, New Jersey, September 26 MediCult a/s (OSE: MEC), a leader in AssistedReproductive Technologies (ART), today announced that it has entered into ashare purchase agreement to acquire MidAtlantic Diagnostics, Inc., a USsupplier of ART products, for DKK 78,6 million (USD 15,5 million).

MidAtlantic Diagnostics provides a complete range of disposables andequipment to embryologists and andrologists, MediCult's core customer base.MidAtlantic Diagnostics also has a strong pipeline of innovative,predominantly disposable, products that fit well with MediCult's and willhelp support the future growth of the combined company.

"For the last few years, an integral part of our corporate strategy hasbeen to further strengthen our ART franchise through acquisitions. To date,the focus has predominantly been on ART media and micropipets following theacquisition of Humagen in 2007. However, the acquisition of MidAtlanticDiagnostics provides an additional dimension with its disposable products.The combined company will be able to leverage product synergies and itsleadership position in the US market to its full potential, providing anopportunity to scale up further," noted Jesper Funding Andersen, CEO ofMediCult. "MediCult as a whole will benefit from a great team of individualswho will be joining the company."

"We have been very impressed by the way that MediCult has strategicallyexpanded on a global basis. We believe the combination of MidAtlanticDiagnostics and MediCult provides multiple advantages not only on a productlevel but also, and perhaps more importantly, with regards to our drivetowards providing infertile couples with the best possible chance ofconceiving," added Terry Fortino, President of MidAtlantic Diagnostics.

Terms of the Acquisition

MediCult has entered into a share purchase agreement with Terry Fortino,President and majority shareholder of MidAtlantic Diagnostics, to purchasethe entire issued share capital for an up-front consideration of DKK 46million in cash (USD 9 million) and deferred payments over a 3 year period ofDKK 30 million (USD 6 million) in cash and DKK 2,5 million (USD 0,5 million)in MediCult shares. Of the upfront payment, DKK 40 million is being financedthrough a 5 year loan agreement with Danske Bank at a variable interest ratelinked to CIBOR (Copenhagen InterBank Offered Rate). No agency fees have beenpaid by MediCult to any third party in the arrangement of the acquisition orthe financing.

Based on preliminary estimates, MidAtlantic Diagnostics is expected tocontribute to MediCult group proforma full year revenues of approximately DKK68 million (USD 13,5 million) in sales for 2008 and DKK 12,7 million (USD 2,5million) in EBIT before any inventory charges. MediCult expects to incurone-time legal and auditing fees of approximately DKK1 million (USD 0,2million) at or before closing in connection with the transaction. Theeffective transaction date will be September 30th 2008, thus providing a 4thquarter effect of the MidAtlantic Diagnostics business on the MediCultaccounts (fully acknowledging standard IFRS practice of writing acquiree'sinventory up from cost to sales price at the time of take over).

Following the acquisition, MidAtlantic Diagnostics will become awholly-owned subsidiary of MediCult and remain at its current location inMount Laurel, New Jersey. The company resides within an 11,000 sq feet rentedbuilding containing offices, warehouses and cleanroom production facilities.Terry Fortino will hold the position of CEO of MidAtlantic Diagnostics andExecutive Vice President in the MediCult group after completion of thetransaction.

Updated FY Guidance

The impact on the FY Guidance of the acquisition of MidAtlanticDiagnostic for Q4 2008 is estimated to be:

*In the new guidance, the effect of accounting rule IFRS 3 on inventory

Post your Comments

Comments should be on the topic and should not be abusive. The editorial team reserves the right to review and moderate the comments posted on the site.
* Your comment can be maximum of 2500 characters
I agree to the terms and conditions

News A - Z


News Search

Medindia Newsletters

Subscribe to our Free Newsletters!

Terms & Conditions and Privacy Policy.

Find a Doctor

Press Release Category

Press Release Archive

Stay Connected

  • Available on the Android Market
  • Available on the App Store