Manchester medical businesses join forces in £9.2m acquisition

Two medical-focused companies based in Manchester have joined forces in a £9.2m acquisition.

AIM-listed Yourgene Health, the international molecular diagnostics group which commercialises genetic products and services, has conditionally agreed to acquire Elucigene.

Elucigene, which was named small business of the year at last month’s North West Masters Awards, is a leading molecular diagnostics manufacturer and developer.

The deal will be satisfied by the payment of £6.3m in cash and the issue of 24,581,111 new ordinary shares.

In order to fund the acquisition and to provide additional working capital for the enlarged group, Yourgene Health is seeking to raise, through the fundraise, a minimum of £10m, before expenses, through the issue of 97,560,976 new ordinary shares.

The directors have the flexibility to increase the size of the fundraise to up to approximately £11.8m.

Stifel Nicolaus Europe Limited is acting for Yourgene as sole bookrunner in relation to the placing, and Cairn Financial Advisers is acting as the company’s nominated adviser.

Lyn Rees, Yourgene chief executive, said: “The acquisition of Elucigene will strengthen Yourgene’s product portfolio within reproductive health and produce cross-selling opportunities across our client bases.

“The combination of the businesses will immediately increase our commercial footprint to 57 territories, adding an additional 150 customers to the enlarged group into which we will aim to cross-sell our respective complementary products.

“We have a unique opportunity to bring our skill sets together under one roof, expand our combined sales force and leverage our respective technical and regulatory expertise and partnerships to extend our genetic testing offering.

“We are excited to be consolidating our position within molecular diagnostics and accelerating our road to profitability.”

Mark Street-Docherty, chief executive of Elucigene, said: “We believe strongly in the rationale for bringing Elucigene’s business together with Yourgene’s and this is reflected in the executive management team of Elucigene rolling the majority of its equity into Yourgene.

“We look forward together to continuing to deliver innovative products that improve patient outcomes.”

The Manchester office of Addleshaw Goddard is advising Yourgene on its £9.2m acquisition and the related £11.8m equity fundraising.

The AG team is being led by partner Roger Hart and includes Lucie Alker, Farah Aslam and Chloe Thornhill.