NextGen buys US-based Proteomic Research for $1.7m; completes share placing
Biotech gene to protein company NextGen Group PLC (NGG.L) has acquired US-based Proteomic Research Services Inc, a specialist in the identification and characterisation of proteins.
NextGen will pay an initial $0.5m and up to a further $1.2m on an earn out basis subject to revenue targets over the next three years.
The acquisition is being funded by a combination of cash and equity, with just over 80% paid through the allotment and issue of just over 7m NextGen shares on completion at 3p each.
The maximum number of NextGen shares that could be issued is about 21.3m. The actual number will be calculated based on the higher of 3p or the then market share price. All these shares will be locked in for three years from completion.
The deal was well received by the market, which bid NextGen’s share price up 2.5% to 1.05p, valuing the Cambridge-based group at £7.3m.
PRS had annual turnover of $1.2m in 2005 and made a net loss of $0.27m from its business of supplying expert proteomic services to the research community, primarily in North America.
NextGen’s board said the acquisition would consolidate the sales, support and service base that NextGen had already established via the Commercial Alliance Agreement entered into with PRS in January, giving NextGen a wholly owned facility from which it can conduct and expand its commercial activities in North America.
It has already entered into several contracts involving PRS’ contractexpress offering, and is negotiating several others, where access to PRS's services and products, as well as technology acquired from Gene Oracle, has been key. The biggest order has been for over several hundred thousand pounds.
PRS President Mike Pisano and his staff will remain with the company. Dr Pisano's duties will increase to include scientific leadership of the new Group
Share placing
NextGen is said it has placed 90m ordinary shares through its Broker, Ellis Stockbrokers Ltd at 0.7p each share to raise £0.63m to fund the cash element of the acquisition and associated costs as well as to provide working capital and development funding for the enlarged group.
CEO James Heffernan (pictured) said: "This acquisition has given us wholly owned facilities and additional staff in the US from which we can commercialise our increasing range of products and services into the market that represents over 50% of the global market for drug development.
“We are now in a position to create a Centre of Excellence to better serve this important market with our products and services. The access to PRS services and products allows us to characterise soluble proteins generated on NextGen's automation platforms, which dramatically increases the value of the contract services that we are now offering”.
He said that a combination of NextGen's advanced automation and fee for service businesses together with PRS' expert protein research and characterisation services, the 2D gel and other consumables offerings, would allow the combined companies to establish many new initiatives while rapidly growing sales.
6th November 2006
