Shield Diagnostics Group to Acquire Axis Biochemicals in £67m All-Paper Deal

Shield Diagnostics Group, a biotechnology company, is planning to take over Axis Biochemicals, a Norwegian rival, in an all-paper deal worth approximately £67m. The two companies, which have developed tests for assessing the risk of heart disease, have agreed in principle to merge, subject to due diligence. Under the proposed deal, shareholders in Axis Biochemicals would receive one Shield share for every Axis share.

Key Takeaways:

• The acquisition would create the largest company in the world for homocysteine testing, a cardiovascular test developed by both Shield and Axis.
• Shield's managing director, David Evans, would become joint managing director with responsibility for operations and finance in the enlarged group.
• Svein Lien, Axis's managing director, would lead marketing and research and development in the enlarged group.
• Nigel Keen, Shield's chairman, would head the new group.
• The deal would remove a leading competitor and bring forward Shield's break-even point by approximately six months to next year.
• Sales of Axis's homocysteine product are growing rapidly due to supply agreements with Abbott Laboratories and Roche Diagnostics.
• The merger, however, would require Shield to raise funds to cover expenses, as the two companies have approximately £5m in cash combined.

Statistics:

• The proposed deal is worth approximately £67m.
• Shares in Axis closed at NKr62.5, up NKr3.5.
• Shield's closing price was 515p, down 5p.
• The enlarged group would have a market capitalisation of approximately £180m.
• The combined cash of the two companies is approximately £5m.
• Sales of Axis's homocysteine product are growing rapidly.

Sources:

• "Shield in £67m bid takeover of Axis", The Daily Telegraph (no date listed)
• "Group would be largest in world in homocysteine testing", The Financial Times (no date listed)