Lab specialist Celsis set for private ownership
pharmafile | August 5, 2009 | News story | Manufacturing and Production |Â Â CelsisÂ
UK laboratory equipment and services company Celsis looks set to be taken into private ownership after its management agreed to takeover terms with newly-formed investment company Nastor, which has been set up by private equity group North Atlantic Value.
The all-cash offer is at a price of 232.5 pence per share and values Celsis at around £54.5 million, a premium of 14.3% over the closing price of the company's shares on July 31.
Celsis said back in February it was considering "strategic alternatives", including the possible sale of its Analytical Laboratory Services outsourcing unit, after seeing demand across the business soften.
In the prospectus for the deal, Nastor said it believed Celsis would do better in private hands as it would "enable the more efficient delivery of management's business plan … within a simplified and more cost and tax efficient corporate structure."
That sentiment was echoed by Jack Rowell, Celsis' non-executive chairman. "In recent years, despite a number of years of solid growth, the company's value has not been fully recognised by the market," he said.
"We are therefore pleased to receive this offer which we believe reflects good value for our business."
The prospectus notes that in the current economic climate listed companies with relatively small market capitalisations find it difficult to attract research coverage or genuine stock liquidity.
Celsis has three operating divisions, all of which have been experiencing weaker demand in the economic downturn. The outsourcing unit had been under a lot of pressure over the last year as the pharmaceutical industry scales back investment in drug discovery and manufacturing-related lab testing services, but picked up in the first quarter of this year.
The other two units – which sell rapid microbial detection instruments and in vitro tools for preclinical drug testing, respectively – have also been battered by the economic storm, according to Celsis' first-quarter results statement released last month.
However, stringent cost-cutting at the firm allowed it to boost operating profits by 18% to $13.2 million for fiscal 2009 as a whole, while revenues stayed level at around $52 million.
North Atlantic Value's funds have already bought around 20% of Celsis' share capital and have commitments from shareholders for the purchase of another 20%, according to the prospectus.
