27 July 2017 – acquisition
The company has announced the acquisition of Elemental Healthcare Limited, a UK-based specialist distributor of medical products. The company has been the exclusive distributor of Surgical Innovations’ products in the UK since 2007. Elemental is a profitable and cash-generative business and its acquisition will provide Surgical Innovations with a direct route to market and will be earnings enhancing. The acquisition is to cost £9.375m subject to an adjustment for net debt at completion, of which £7.5m will be paid in cash with the balance satisfied by the issue of new shares. The company is to raise £5.5m through the issue of new shares at 3p to help fund the cash part of the deal. In the year to 31 March 2017, Elemental made normalised pre-tax profits of £1.1m. This is a very significant deal for the group and we continue to rate the shares as a BUY.