Business
Sale of equity in STEM Animal Health Inc.
Sale of equity in STEM Animal Health Inc..
About this update from Animalcare Group Plc
[{"type":"text","content":"\n\nAnimalcare Group plc\n(\"Animalcare\", the \"Company\" or the \"Group\")\n \nSale of equity in STEM Animal Health Inc. to Dechra Pharmaceuticals Limited\n \nExclusive Licence and Distribution Agreement for biofilm products enhanced\n \n11 April 2024. Animalcare Group plc (AIM: ANCR), the international animal health business, today announces that it has reached agreement in principle to sell its 33.34% equity stake in STEM Animal Health Inc. (STEM) to Dechra Pharmaceuticals Limited (\"Dechra\") for a total cash payment of US$4.7m, payable upon completion of the transaction. STEM is currently owned by Animalcare and Canada-based Kane Biotech Inc. (\"Kane Biotech\").\n \nOther items covered by the agreement (the \"Agreement\") will bring the total potential monetary value of the deal for the Group to approximately US$5.4m. The sale of the minority stake secures a positive return on investment for Animalcare while further strengthening the Group's cash position following the disposal of Identicare announced on 28 February 2024.\n \nSTEM was established in September 2020 as a joint venture by Animalcare and Kane Biotech with a focus on treating biofilm-related ailments in animals. Under that agreement, Animalcare was granted rights to commercialise products based on Kane Biotech's coactiv+TM and DispersinB® technology in global veterinary markets outside the Americas.\n \nUnder the terms of the Agreement, the existing licence and distribution agreement with STEM will be extended to allow Animalcare access to all channels in Europe and the UK. This means Animalcare can maximise the value of the dental franchise through both veterinary and retail channels including via e-commerce.\n \nIn addition, Animalcare will maintain influence over the choice of new product development options associated with the licensed intellectual property through a newly formed joint innovation team with Dechra and Kane Biotech.\n \nCompletion of the transaction requires the consent of more than 50% of the shareholders of Kane Biotech.\n \nChief Executive Officer of Animalcare, Jenny Winter said: \"This transaction offers value for Animalcare on several levels. Not only have we secured an attractive return on our equity investment in STEM that adds to our investment firepower, we have gained enhanced commercial...