BioProgress acquires nutritionist PharmaHerb For £0.6m
BioProgress plc, the specialty pharma and healthcare company, said it has acquired PharmaHerb Ltd, a UK-based vitamin and nutritional business for £600,000 in shares and cash.
PharmaHerb is a specialist 'Over-the-Counter products company, whose core activities include product formulation, manufacturing and packaging. The acquisition includes PharmaHerb's Kudos range of brands together with its sales and marketing capabilities.
BioProgress said that the Kudos brand was a premier label business focused on the promotion of vitamin and nutritional products through established and diversified distribution channels. These distribution channels include niche health shops, pharmacies as well as supermarket chains. The business also has a direct-to-consumer internet sales capability.
CEO Richard Trevillion (pictured) said: "The acquisition of PharmaHerb and the Kudos brand are an important step as a launch pad for our own XGEL OTC products and to generate revenues within the UK market. The acquisition further strengthens our position and reflects our drive into the growing niche branded OTC market. The established distribution channels that come with this acquisition allows us greater and more rapid market access for our growing product portfolio."
The acquisition involved £150,000 in cash and the issue of 694,981 ordinary shares of the Company with a value of £450,000.
The Cambridge-based group saw its share price slide 1.75p to 63p on the news. It is now valued at around just over £100m.
BioProgress said the acquisition creates an OTC platform with established sales and marketing channels which will allow BioProgress to directly market its own OTC ranges into its domestic market.
Pharmaherb acquired the assets of Kudos in March 2007 which included packaging equipment, stock, formulations, intellectual property as well as sales and marketing agreements and established channels to the OTC consumer market.
The sales of Pharmaherb are negligible (2006 sales of Kudos were £255,000 and the business invested approximately £1m in capital for assets and infrastructure growth), however, the assets represent an operating infrastructure and thus a low cost entry into the UK market, BioProgress said.
BioProgress expects to utilise these assets immediately to create organic growth. Combining the Kudos and its Dexo product ranges will provide a broader product portfolio to develop and expand the acquired sales and distribution capabilities. In particular the business will be used as a base to launch future UK Soluleaves, Meltums and other XGEL enhanced OTC products.
21st May 2007
