Divestment of non-core subsidiary

RNS Number : 8697T

Plant Health Care PLC

25 November 2013

 



25 November 2013

PLANT HEALTH CARE PLC

("Plant Health Care" or the "Company")

Divestment of non-core subsidiary

Plant Health Care (AIM / CISX: PHC), a leading provider of novel patent protected biological products to the global agriculture markets, announced a new strategy in March 2013, to create a business focused on accelerating the research and development of its Harpin technology platform and maximising sales of the current Harpin and Myconate products over the next three years (the "Strategy").

As part of the implementation of the Strategy, Plant Health Care today announces it has entered into an agreement for the divestment of the Company's wholly-owned Netherlands subsidiary, Plant Health Care BV (the "Subsidiary"), to the management of the Subsidiary under the leadership of Mr. Pius Floris (the "Disposal"). The Disposal, which will result in the divestment of the Company's European distribution businesses, involves the sale of the Subsidiary and the sale to the Subsidiary of all inventory (except that of Harpin and Myconate) currently held by the Company's Spanish and UK subsidiaries, valued at approximately US$19,956 and US$89,193 respectively. It is expected the Subsidiary will change its name in the next 12 months. The consideration for the Disposal is €1 and the repayment of an outstanding inter-company loan of approximately US$536,230. This will result in a write-off of approximately US$281,472 to Plant Health Care.

In the six months ended 30 June 2013, the Subsidiary had total sales of US$1,070,560 (year ended 31 December 2012: US$1,552,260), of which Harpin and Myconate represented approximately 4 percent. In the six months ended 30 June 2013, the Subsidiary made profits before tax of US$173,439 (year ended 31 December 2012: US$7,214).

Proceeds from the Disposal will be retained for working capital purposes and for continued implementation of the Company's Strategy.

The Company retains all rights to the distribution of Harpin and Myconate and of all future Plant Health Care products.  It is the Company's intention to continue to invest further in the marketing and distribution of these products across Europe, using its existing international distribution capability in the UK. The Disposal will enable the Company to focus its resources on implementing the Strategy and creating value for its shareholders.

Related Party Opinion

In view of Mr. Pius Floris being a director of the Subsidiary, and the majority owner of the Subsidiary following completion of the Disposal, the transaction constitutes a related party transaction under the AIM Rules. The Directors consider, having consulted with the Company's nominated adviser, Liberum Capital, that the terms of the Disposal are fair and reasonable in so far as the Company's shareholders are concerned.

Commenting on the Transaction, Mr Paul Schmidt, CEO of Plant Health Care, said:

"I am delighted that we have reached an agreement to divest these businesses to Pius and his team.  This divestment leaves Plant Health Care a much more focused business, better able to drive the development of our core products and technologies, in line with our strategy. We thank Pius for 14 years of dedicated service to Plant Health Care and wish him well in his new endeavour."

- ENDS -

For further information, please contact:
Plant Health Care plc
Paul Schmidt, Chief Executive Officer	Tel: [phone]
Liberum Capital - Nomad and Broker
Clayton Bush / Thomas Bective	Tel: [phone]
Powerscourt
Sophie Moate / Nick Dibden	Tel: [phone]
Company website: www.planthealthcare.com

About Plant Health Care: Plant Health Care is a leading provider of patent protected biological products aimed at the agriculture industry that are environmentally beneficial. Through the commercialisation of these products, Plant Health Care is capitalising on current long-term trends toward natural systems and biological products for plant care and soil and water management.

 

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