Conclusion of Strategic Review

RNS Number : 3630W

EKF Diagnostics Holdings PLC

18 August 2015

 

EKF Diagnostics Holdings plc

("EKF", the "Company")

Conclusion of Strategic Review

EKF Diagnostics Holdings plc (AIM: EKF), the AIM listed point-of-care, central laboratory and molecular diagnostics business, announced on 2 April 2015 that the Board of Directors had initiated a strategic review headed by a Committee of the Non-Executive Directors of EKF.

The Committee is conscious of the desire by a number of key shareholders that the value that has been created by the Board of EKF should be realised in part or in full, and have concluded that this should be the Directors' primary aim. With this in mind we can confirm that the strategic review has resulted inter-alia in a non-binding preliminary proposal of $110 million, on a cash free debt free basis, for our Point-of-Care business, which excludes the Clinical Chemistry and Molecular Diagnostics businesses.

In the event that the interest shown does not lead to a realisation event in the short-term, then it is the Board's intention to firstly invite Mr Ron Zwanziger onto the Board as Chairman, with the current Chairman becoming deputy Chairman, and then secondly to spin-off the Molecular Diagnostics division (including biomarkers) into a separate vehicle focussed on personalised medicine, a process which will be led by the current Chairman.

In the absence of a realisation event in the short-term the Directors believe that this route represents the best way forward as it will enable Shareholders to benefit from:

a) the Point-of-Care business (being both the Point-of-Care and Clinical Chemistry divisions), having a clear focus, with its earnings profile undiluted by the current investment (and related losses) associated with the Molecular Diagnostics division. The Directors believe that a number of growth opportunities, which the Company currently cannot realise, will become achievable, with Mr Zwanziger as Chairman. This will ensure that EKF's growth trajectory can be accelerated.

b) the Molecular Diagnostics division (including biomarkers) having a singular focus not impacted by the other activities in the Group and which, with the necessary investment, will increase the value currently attributable to this business.

David Evans, Executive Chairman of EKF Diagnostics Holdings plc, commented:

"I welcome the conclusions of my Non-Executive colleagues and, as a Board, we are well aware that we are custodians of shareholder value and as such will remain focussed on realising this value if practically possible. If this cannot be achieved in the short-term I am confident that Ron Zwanziger, a shareholder and an individual with a strong history of growing point-of-care businesses, will open up a number of opportunities for the Company as Chairman, and that the Molecular Diagnostics division's move to become a distinct and separate business will allow us to deliver greater benefits for shareholders."

Enquiries:

EKF Diagnostics Holdings plc	Tel: [phone]
David Evans, Executive Chairman	Mob: [phone]
Dr Kevin Wilson, Chair of the independent committee		Mob: [phone]
Panmure Gordon (UK) Limited	Tel: [phone]
Robert Naylor (Corporate Finance)
Paul Fincham (Corporate Finance)
Walbrook PR Limited	Tel: [phone] or [e-mail]
Paul McManus	Mob: [phone]
Lianne Cawthorne	Mob: [phone]

About EKF Diagnostics Holdings plc - www.ekfdiagnostics.com

EKF Diagnostics Holdings plc was formed in July 2010 following the acquisition of EKF-diagnostic GmbH for €14.32m and refocused its strategy to one of building a substantial point of care diagnostics business. As part of this strategy, the Group has integrated three further acquisitions, Quotient Diagnostics Limited (acquired in September 2010), Argutus Medical Limited (acquired in December 2010) and Stanbio Laboratory L.P. (acquired in June 2011). In 2013 EKF established a new subsidiary, EKF Molecular Diagnostics Ltd, to focus on molecular and companion diagnostics and acquired 360 Genomics Ltd, a business that owns diagnostics technologies for cancer gene detection.

The Company, with its head office in Cardiff and operations in London, Germany, Poland, Russia, Ireland and the US, is a leading diagnostics business, focussing on the development, production and distribution of chemical reagents and analysers for the testing of Glucose, Lactate, Haemoglobin, Haematocrit and HbA1c.

In March 2011 EKF entered into a distribution agreement with Alere Inc ("Alere"), a global diagnostics company, under which Alere was appointed the exclusive distributor of EKF's CLIA waived Hemo Control device and cuvettes in the US, Canada and United Kingdom. The device is distributed in the US under the name HemoPoint H2. 

In March 2014, EKF acquired Separation Technology, Inc., a Florida based manufacturer of in vitro diagnostics devices for the haematology testing market. In April 2014, EKF completed the acquisitions of Selah Genomics Inc., a US based developer of molecular diagnostics for personalised medicine and DiaSpect Medical AB., a Swedish based manufacturer of point-of-care haemoglobin analysers.

 

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