Acquisition consistent with Avacta Diagnostics M&A strategy and complements earlier acquisition of Launch Diagnostics
Avacta Group plc (AIM: AVCT), a life sciences company developing innovative, targeted oncology drugs and powerful diagnostics, is pleased to announce that it has acquired Coris Bioconcept SRL (“Coris“) for an upfront cash consideration of £7.4 million (on a debt-free/cash-free basis and subject to customary working capital adjustments), with an earnout based on future business performance, payable in cash, of up to £3.0 million (the “Acquisition”).
Avacta’s Diagnostics division is driving ambitious growth through an M&A-led strategy with the aim of supporting healthcare professionals and broadening access to high quality diagnostics. The strategy is focused on both acquiring routes into the diagnostics market and appropriate IP-rich product portfolios. The first acquisition, Launch Diagnostics, in October 2022 provides the group with a well-established route to market in the centralised professional healthcare market, primarily in the UK and France.
Coris, based in Gembloux, Belgium and established in 1996, develops, manufactures and markets rapid diagnostic test kits, mainly lateral flow tests, for use by healthcare professionals. Coris is ISO 13485 certified and markets its products through distributors in Europe, Asia, South America, Africa and Oceania. Coris’ revenue splits for the year ended 31 December 2021 were: 80% Europe; 12% America; and 8% from the Middle East, Africa and Asia-Pacific.
Unaudited revenues for the year ended 31 December 2022 (“FY22”) were £4.6 million, the majority of which were non-COVID-19 related. FY21-22 gross margin was approximately 50%, with EBITDA in FY22 of £0.35 million and a loss-after-tax of £0.02 million. Net assets as at 31 December 2022 were £6.0 million.
Operationally, Coris employs 35 members of staff split across Production, Sales, Marketing, Quality Control, Regulation and Administration. In March 2023, the business completed the construction of a new 10,700ft2 production, offices and warehouse facility in Gembloux.
Coris’ product portfolio comprises diagnostic tests for respiratory, gastro-enteric and blood-borne pathogens (bacteria, viruses and parasites) and for the detection of antibiotic resistance markers. As part of this portfolio, Coris markets a COVID-19 lateral flow test. Due to this, Avacta has taken the commercial decision to halt the redevelopment of its own AffiDX® SARS-CoV-2 antigen lateral flow test.
The existing Coris management team will remain with the business and work closely with Avacta Diagnostics businesses to drive growth and margins through improved distribution channels and an expanded product range. Avacta will transfer its lateral flow product development activities to Coris and support that activity through ongoing development of Affimer® reagents for new products or to enhance existing ones.
Dr Alastair Smith, Chief Executive Officer, Avacta Group plc, commented:
“The acquisition of Coris provides the Group with a broad, professional-use rapid test product portfolio. Complementing the acquisition of Launch Diagnostics last year, the Acquisition represents an important step in establishing a full-spectrum in-vitro diagnostics business covering centralised, pathology laboratory diagnostics, as well as decentralised, point-of-care testing solutions outside the hospital setting.
“Antibiotic resistance is a major global challenge and we strongly believe that the market for antimicrobial resistance (“AMR”) testing is one with good future growth prospects. We are particularly pleased, therefore, to have added an AMR product portfolio to the Group with this acquisition.
“With this acquisition, our Diagnostics division has taken another important step towards realising its mission to support healthcare professionals and broaden access to high quality diagnostics.”