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Bullboard - Stock Discussion Forum Hamilton Thorne Ltd HTLZF

Hamilton Thorne Ltd. is a provider of precision instruments, consumables, software and services to assisted reproductive technologies (ART), research, and cell biology markets. The Company markets its products and services under the Hamilton Thorne, Gynemed, Planer, Tek-Event, IVFtech, Microptic, and Embryotech Laboratories brands. It also provides an array of third-party equipment and... see more

OTCPK:HTLZF - Post Discussion

Hamilton Thorne Ltd > Hamilton Thorne Announces the Acquisition of Gynetics Medic
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Post by Charley33 on Oct 10, 2023 11:21am

Hamilton Thorne Announces the Acquisition of Gynetics Medic

 Hamilton Thorne Announces the Acquisition of Gynetics Medical Products N.V.
11:13 AM Eastern Daylight Time Oct 10, 2023

 

Strengthens Hamilton Thorne footprint in consumables within the Assisted Reproductive Technology market

 

 

 

Expands expertise, manufacturing, and product offerings in consumables in the ever-growing European IVF market

 

 

Beverly, Massachusetts and Toronto, Ontario--(Newsfile Corp. - October 10, 2023) - Hamilton Thorne Ltd. (TSX: HTL) ("Hamilton Thorne" or the "Company"), a leading provider of precision instruments, consumables, software, and services to the Assisted Reproductive Technologies ("ART") research and cell biology markets, today announced that it has completed the acquisition (the "Transaction") of Gynetics Medical Products, N.V. and Gynetics Services B.V. (collectively, "Gynetics").

Gynetics, based in Lommel, Belgium is a leading manufacturer of a wide range of innovative, high-quality In Vitro Fertilization ("IVF") devices in the global IVF market. The Transaction reinforces Hamilton Thorne's consumables product offerings and provides the Company with additional profitable operations in the well-established European ART market. For the trailing twelve months ending May 31, 2023, Gynetics had revenues of approximately €4.6 million (US$4.9 million) and Adjusted EBITDA of approximately €2.3 million (US$2.5 million). During this period, approximately 20% of Gynetics sales were made to Hamilton Thorne.

Key Benefits of the Transaction:

 

Addition of a profitable portfolio of premium consumables with recurring revenue, that is highly complementary to Hamilton Thorne's existing product offerings

 

 

 

Diversifies and increases product offerings through the addition of own-branded embryo transfer catheters and ovum pick up needles that are used in the IVF clinic procedure room as well as the laboratory

 

 

 

Opportunity to expand Gynetics product offerings into additional international markets and increase direct sales through existing Hamilton Thorne sales channels

 

 

 

Financed through an expansion of existing credit facility, cash on hand, and share consideration to the seller

 

 

 

Expected to be immediately accretive to revenue and Adjusted EBITDA

 

 

"We are excited to welcome Gynetics to the Hamilton Thorne family. This acquisition enhances our presence in the very attractive European ART market, further diversifies our revenue base, and increases our percentage of recurring revenues through the sale of additional consumable products, including Gynetics' ovum pick up needles and embryo transfer catheters," said David Wolf, President and Chief Executive Officer of Hamilton Thorne. "Gynetics is a well-established and respected provider of premium clinical and laboratory consumables in the European ART market that shares our total commitment to the highest standards in customer service and quality. From our existing business relationships, the Gynetics staff is well known to us. I am particularly pleased that all Gynetics' employees will join our team and help drive the growth of the existing Gynetics business."

Acquisition Details

Pursuant to the Transaction, Hamilton Thorne indirectly acquired 100% of capital stock of Gynetics based on an enterprise value of approximately €18.3 million (US$19.4 million) or approximately 8 times Gynetics' trailing twelve-months Adjusted EBITDA ending May 31, 2023. The nominal purchase price, paid at closing, of approximately €18.7 million (~US$19.8 million) takes into account certain working capital and other adjustments.

On closing, Hamilton Thorne paid consideration of approximately €14.0 million (US$14.8 million) in cash, plus the issuance of an aggregate of 5,007,117 common shares (the "Consideration Shares") of Hamilton Thorne stock at a deemed issuance price of C$1.335 per share with a deemed aggregate value of approximately €4.7 million (~US$4.9 million). The cash component of this transaction was financed with a drawdown of US$8.0 million from its acquisition line of credit facility with its existing senior lender and cash on hand. The line of credit converts post-closing to a secured five-year term loan which bears interest at a fix rate of approximately 8.0% per annum, and amortizes over the life of the loan.

The Consideration Shares will be subject to a 5-year escrow pending final calculation of any closing adjustments and to satisfy any possible indemnity claims.

Francesco Fragasso, CFO of Hamilton Thorne commented, "Our overall liquidity continues to be very strong with over US$8.8 million cash on hand and approximately a 1.7 post-closing leverage ratio (TTM EBITDA to Senior Debt) on a pro-forma basis. Given this cash on hand, the cash flow generated by our business, and our borrowing capability, we have enough dry powder to continue our aggressive acquisition program."

The Transaction is subject to receipt of final acceptance from the Toronto Stock Exchange in accordance with its policies.

Comment by dogatcat on Oct 10, 2023 11:35am
They used some stock to grab this gem but I like that it is very accretive right out of the gate.   This wil pay off in the longer term.   Another good pick up by David Wolf!  
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