Inverness Medical Innovations and Concateno plc today announced that they have reached agreement on a proposal for Inverness to acquire all of Concateno’s outstanding share capital.
Concateno, located in London, is a leading European supplier of drugs of abuse testing products and services with 2008 revenues of approximately 47.5 million pounds Sterling (or approximately $76 million). Concateno is quoted on the AIM market of the London Stock Exchange.
The acquisition is expected to be implemented by way of a court-approved scheme of arrangement under Part 26 of the United Kingdom Companies Act 2006. The scheme of arrangement is subject to approval by the shareholders of Concateno and sanction of the High Court of Justice in England and Wales as well as other customary conditions. If approved the acquisition would be expected to become effective during the third quarter of 2009.
Under the proposed terms of the acquisition, each holder of Concateno shares will receive, for each Concateno share, 79 pence in cash and 0.02 shares of Inverness’ common stock, based on Inverness’ closing price per common share on the New York Stock Exchange on June 4, 2009 of $34.00 and applying an exchange rate of 1.00 pound:$1.61, for a total implied value per Concateno share of 121.24 pence. Based on information supplied by Concateno, there are approximately 103.2 million Concateno shares currently issued and outstanding after consideration of certain shares which will be repurchased by Concateno for nominal consideration and cancelled as a result of the transaction.
In the event that, as a result of changes in Inverness’ stock price and exchange rates, the value of the total consideration payable per Concateno share is less than 120 pence, Inverness will be obliged to provide further consideration to Concateno shareholders such that the overall value of the consideration per Concateno share is 120 pence. Any such additional consideration will consist of up to 1 million pounds cash plus up to 500,000 additional shares of common stock or, at its option, the cash equivalent thereof. In the event that the cash consideration of up to 1 million pounds is not needed to increase the overall consideration to 120 pence, the unused portion will be paid to certain key managers of Concateno.
Commenting on the proposed transaction, Ron Zwanziger, CEO of Inverness said, "Concateno’s unique position in the European point of care, drugs of abuse testing market is a perfect complement to our existing drugs of abuse business, which operates primarily in the United States. There is also very little product overlap because we already supply Concateno with many of its visually-read drugs of abuse tests while Concateno manufactures meter-read products through its Cozart subsidiary."
Keith Tozzi, Chairman of Concateno added, "By successfully executing an acquisition based growth strategy, Concateno has become an important player in the European drugs of abuse testing business, offering its wide customer base a complete range of testing solutions. We believe that Inverness’ proposal reflects the growth potential of the business, and that under Inverness’ ownership, Concateno can expand to take further advantage of a range of attractive international opportunities."
Inverness is represented by Wragge & Co LLP in London and Foley Hoag LLP in Boston. Inverness also retained IDJ International as financial advisor. Concateno is represented by DLA in London and has retained Collins Stewart and UBS Investment Bank as its financial advisors.
Source: Inverness Medical
