Nanogen (NGEN) and The Elitech Group Announce Merger Agreement
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Nanogen, Inc. (NASDAQ: NGEN) and The Elitech Group, a private French diagnostics company, announced a definitive agreement to combine the two companies. The combination will create a global provider of products to the molecular, point-of-care, clinical chemistry and microbiology diagnostics markets with expected first year revenues of more than $150 million and positive EBITDA. The transaction combines Nanogen’s technology leadership in molecular and point-of-care diagnostics with the strong revenue and profit base stemming from The Elitech Group’s global manufacturing, sales and distribution of IVD products for the clinical chemistry and microbiology markets. The board of directors of both companies unanimously approved the agreement to combine the two companies.
Elitech shareholders are expected to receive shares of Nanogen common stock that have a value of €66.5 million. Under the terms of the share exchange agreement, the number of Nanogen common shares issued to Elitech shareholders is subject to a “collar”, which among other things, provides that Elitech shareholders will receive a minimum of 58.7% and a maximum of 68.7% of the total pro forma fully diluted shares outstanding upon completion of the merger subject to other limitations.
In conjunction with the share exchange agreements, Nanogen has also entered into interim funding agreements with Elitech and certain existing Nanogen investors pursuant to which they will loan Nanogen $8 million to fund Nanogen’s operations during the period between signing and closing of the combination.
The combined company will be headquartered in San Diego under the leadership of Pierre Debiais as CEO. Michael Saunders, currently group vice president of marketing and business development for The Elitech Group will become COO, with a focus on European business and global commercial operations. [SM]
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