Business
Acquisition & Trading Update
Acquisition & Trading Update.
About this update from Tristel Plc
[{"type":"text","content":"\n Tristel PLC\n23 May 2006\n\n Tristel plc\n\n £1m acquisition of Vernagene Limited\n Trading update\n\nTristel plc ('Tristel'), the healthcare business which uses its proprietary\nchlorine dioxide chemistry to create infection control products for hospitals,\nannounces that it has exchanged contracts for the acquisition of Vernagene\nLimited ('Vernagene'), the chlorine dioxide specialist focusing on the water\ntreatment and food processing industries, for £1m. The acquisition will be\nimmediately earnings enhancing.\n\nIt is anticipated that, subject to satisfaction of certain conditions precedent,\nthe acquisition will be completed shortly.\n\nVernagene, which is based in Bolton, focuses on water treatment and purification\nand hygiene control within the food processing industry. It has been divested by\nVerna Group Holdings Limited.\n\nVernagene employs six people and in the year ended 31 March 2006 achieved sales\nof £1,177,000 (2005: £1,145,000 and 2004: £906,000) and pre-tax profits of\n£301,000. As at 31 March 2006, Vernagene had net assets of £289,000. Tristel has\npurchased the share capital of the company for £1m in cash and may pay an\nadditional sum of up to £100,000 on an earn-out basis. The acquisition will be\nfunded using existing cash resources (i.e. surplus cash from flotation and\noperations) and a short term loan of £200,000 from one of its shareholders. The\nCompany intends to refinance this loan with commercial bank term debt. Currently\nTristel has no debt.\n\nThe acquisition will extend Tristel's reach beyond the infection control market\nin hospitals, where it has focused its activities to date, enabling it to expand\ninto new markets where chlorine dioxide is increasingly being used. Vernagene\nhas approximately 200 customers in the government, municipal, industrial,\nhealthcare and food sectors. Importantly, Vernagene provides water treatment\nsolutions to approximately 40 UK hospitals, where its products are used for\nLegionella control, whilst Tristel supplies approximately 400 hospitals with its\ninstrument and surface disinfection products. The Board believes there will be\nsignificant cross selling opportunities.\n\nThe acquisition will also present an opportunity for Tristel to apply its sales\nand marketing skills to the Vernagene product offering as well as the\nopportunity to combin...