Source: © Ecceback/Fotolia
Source: © Ecceback/Fotolia

Novacyt said today it will acquire molecular diagnostics developer Primer Design for up to £12.35 million ($17.6 million) in a deal the buyer said would complement and expand its molecular diagnostics portfolios in cancer and infectious disease.

The deal will give Novacyt a second technology platform, genesig®. The rapid real-time PCR platform includes qPCR detection kits for uses that include human pathogen detection, veterinary diseases, food & water analysis, GMO detection, species identification, and bio-threat detection.

According to Primer Design, genesig is now used by customers in over 100 countries worldwide, with the kits designed to work with any real time PCR machine.

Novacyt said it expects genesig to generate unspecified “significant” future synergies with its own NOVAprep® tech platform, which enjoyed a 30% year-over-year sales growth in 2015. Sales are expected to continue growing this year, Novacyt added, given expansion into new international markets and a continued focus on growing China sales by distribution partner Leica Biosystems.

Primer Design was founded in 2005 within Southampton University's School of Medicine by researchers Rob Powell, Ph.D., Tom Brown, Ph.D., and Jim Wicks, Ph.D. The company has built a portfolio of more than 450 molecular assays used within non-clinical sectors, such as academia and industrial markets, in over 100 countries worldwide.

In 2015, Primer Design generated €1.8 million (nearly $2 million) in earnings before interest, taxes, depreciation, and amortization (EBITDA) on revenues of €5.3 million ($5.8 million).

Primer Design reasons that Novacyt immediately provides both regulatory and sales infrastructure needed to accelerate development and delivery of diagnostic products—and achieve its goal of developing a clinical-based diagnostics business. Novacyt concluded that its IVD business, through its Lab21 brands, will benefit from Primer Design’s pipeline of molecular products. The acquisition of Primer Design will result in Novacyt being profitable this year, the companies said.

Novacyt will acquire Primer Design for £9.85 million (approximately $14.1 million), plus an additional £2.5 million (about $3.6 million) tied to achieving certain sales targets over three years. The deal price includes £4.85 million ($6.9 million) of Novacyt shares to be issued to Primer Design’s shareholders, and the remainder in cash.

Novacyt said it will finance the deal by raising at least €7 million ($7.6 million) in cash. The deal is subject to customary closing conditions, as well as securing financing for the cash portion of the purchase price, and approval by Novacyt shareholders to issue new shares to Primer Design’s shareholders at a board meeting set for February 22. The acquisition is expected to close by early March.

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