EKF Diagnostics, Cardiff, UK, recently agreed to sell its subsidiary, Selah Genomics Inc, Greenville, SC, back to cofounders Michael Bolick and Jeremy Stuart for a “nominal” amount.
EKF acquired Selah in April 2014 for $35.6 million, paid in shares of the new parent company. For the period from its acquisition to December 31, 2014, Selah reported an after-tax loss of £600,000 ($892,000). For the period from January 1, 2015, to November 30, 2015, the subsidiary reported an additional after-tax loss of £2.6 million ($3.9 million).
As of December 31, 2014, EKF’s balance sheet valued Selah at £41.4 million ($61.5 million). According to EKF, that value will now be written off.
EKF estimates that its sale of Selah will save the company about £2 million ($2.9 million) annually. If Selah secures further equity funding within 12 months, EKF will obtain a 10% equity interest in Selah. If no external funding is obtained, and if Selah or its business are sold, EKF will receive 10% of the net proceeds of such a sale.
Commenting on the divestiture, Ron Zwanziger, EKF’s nonexecutive chairman, says, “Today’s sale of Selah, with the associated cost savings, is another step towards reestablishing EKF as a profitable, cash-generating, point-of-care diagnostics business.”
For more information, visit EKF Diagnostics.
