TIDMNSCI
RNS Number : 1089W
NetScientific PLC
20 December 2021
NetScientific plc
("NetScientific", the "Group" or the "Company")
Acquisition of majority stake in Cetromed
Investment in Cetromed subsidiary FOx Biosystems
Acquisition of majority stake in Cetromed
NetScientific plc (AIM: NSCI), the international life sciences
and sustainability technology investment and commercialisation
group, announces the acquisition on 17 December 2021 of 75% of the
issued share capital of Cetromed Limited ("Cetromed"), a life
sciences holding company with several portfolio companies spun out
of the University of Leuven, Belgium.
The acquisition of the majority stake in Cetromed will result in
further internationalisation of NetScientific's portfolio and
exposure to a key European high-tech cluster around University of
Leuven, whilst being consistent with the Group's capital light
strategy.
The consideration of GBP192,390 for the acquisition
comprises:
(i) the issue of 146,542 NetScientific new ordinary shares
("Consideration Shares") valued at GBP150,000 based on an agreed
price per share of GBP1.0236, based upon the average of the middle
market quotations between 1 November 2021 and 5 November 2021
(inclusive); and
(ii) the issue of warrants to subscribe for a further 146,542
NetScientific new ordinary shares at a strike price of GBP1.30 per
share and exercisable within five years, valued at
GBP42,390.00.
Cetromed was a holding company owned by the Azima Trust (through
Zahra Holdings Ltd), the family trust of Farad Azima, the founder
and ex-CEO of NetScientific (who passed away in 2020). The
portfolio was formed around several life sciences investments
commercialised out of the Belgium-based K.U. Leuven, a leading
European research institution with strengths in Medical
Technologies, Bio-Sciences and Environment, and others. Its core
assets include:
-- FOx Biosystems (5.059% stake) which provides real-time,
label-free analysis technology based on an innovative
fibre-optic-based surface plasmon resonance biosensor, enabling
users to generate high quality biomolecular data such as affinity
data, kinetic data and concentration measurements. The stake was
valued at c. EUR400k at the last investment round of c.EUR7.91m in
2020. The company was formed as a spin-out following a sponsored
research agreement with K.U. Leuven that saw Cetromed invest
EUR537k.. The company is backed by LRM, Heran Partners, K.U.
Leuven's Gemma Frisius Fund, and Leuven University.
-- DName-iT (61.54% stake) which is developing biological
barcodes to provide improved quality assurance through the entire
genetic testing process. This technology offers a new level of
traceability and quality control to the workflow of genetic tests
based on Next Generation Sequencing (NGS) and beyond. The previous
funding round was GBP1.3m of which Cetromed invested GBP0.8m for
its stake in 2015.
-- Oncocidia (41.27% stake) which is developing a targeted
radiopharmaceutical cancer treatment, which involves extending the
already successful use of Iodine-131 in treating thyroid cancer, to
treat solid cancers elsewhere in the body. Cetromed invested
GBP0.2m for its stake in 2015.
In the 11 months to 30 November 2021, Cetromed has incurred
losses before tax of approximately GBP40,000 on nil turnover. On
completion, there will be a write-off of liabilities of GBP3.4m
between Cetromed and Zahra Holdings Ltd, and as a result net assets
on completion will be GBP0.8m.
Investment in Cetromed subsidiary FOx Biosystems
In addition, it is also announced that shortly after closing the
Group will advance to Cetromed a secured loan of GBP200,000,
enabling a follow-on investment of GBP150,000 by Cetromed into its
portfolio company, FOx Biosystems as part of a EUR2.63m investment
round by FOx Biosystems' investors.
The secured loan, which has a floating charge over the assets
and carries interest at 8 per cent per annum, is repayable within
three years.
Zahra Holdings Limited lock in
Zahra Holdings Limited has agreed to lock-in provisions, for a
12-month period following completion of the acquisition, relating
to the Consideration Shares and the existing 938,952 NetScientific
shares held by Zedra Trust Company (Jersey) Limited. Zahra Holdings
Limited and Zedra Trust Company (Jersey) Limited are Azima Trust
companies.
Justin Martin from Azima Trust commented:
"The Azima family is pleased that its trustees have been able to
arrange the sale of 75% of the Trust's holding in Cetromed to
NetScientific PLC. NetScientific (in which the Trust retains a
significant holding) was founded by Farad Azima. Farad Azima held
the current management of NetScientific in high regard and, prior
to his death, was hoping to merge the Cetromed technologies with
those of NetScientific. The Azima family is delighted that this
aspiration has now been achieved. It has every confidence that the
NetScientific team will be a reliable steward of the Trust's
investment."
Thomas van Elzakker, CEO of FOx Biosystems said:
"We very much welcome NetScientific's support (through Cetromed)
for FOx Biosystems and look forward to working with the
NetScientific team and its trans-Atlantic relationships in pursuing
our international commercial growth ambitions."
Dr. Ilian Iliev, CEO of NetScientific commented:
"We were delighted to work with the Azima Trust on this
opportunity, building on the founder's legacy. The deal
demonstrates NSCI's capital light investment approach, is additive
to NSCI's balance sheet and opens up future opportunities at
minimal cash commitment. In line with our international approach,
it also establishes relationships in a key European high-tech
cluster around the University of Leuven. The co-investment in Fox
Biosystems alongside credible EU VC investors provides further
growth potential."
John Clarkson, Chairman of NetScientific commented:
"The acquisition of Cetromed, building on the good relationship
with the Azima Trust, is another exciting step in the
implementation of our growth strategy. This judicious investment
utilises NetScientific's shares, rather than cash, to fund this
European expansion. We will apply our pro-active management,
structured approach and group synergies to unlock the significant
latent potential and deliver added shareholder value."
For more information, please contact:
NetScientific Via Walbrook PR
Ilian Iliev, CEO
WH Ireland (NOMAD, Financial Adviser
and Broker)
Chris Fielding / Darshan Patel +44 (0)20 7220 1666
Walbrook PR
Nick Rome/ Paul McManus/ 07748 325 236, 07980 541 893
Nicholas Johnson or 07884 664 686
About NetScientific
NetScientific plc (AIM: NSCI) is a holding company, that invests
in, develops, commercialises and realises shareholder value in life
sciences/healthcare, sustainability and technology companies, which
offer significant growth potential predominately in the UK and USA,
as well as globally.
With the acquisition of EMV Capital in August 2020, the Group
doubled its portfolio from 8 to 17 companies, either through direct
subsidiary, balance sheet investment or capital under advisory,
varying from start-up private companies to publicly listed
equities.
NetScientific delivers shareholder returns through a proactive
and hands-on management approach to their portfolio companies;
identifying, investing in, and helping to build game-changing
companies. The Group targets value inflection points and the
release of value through partial or full exits from trade sales,
public listings, or equity sales. The Company has a strong
transatlantic and growing international presence, providing
attractive expansion prospects.
NSCI can deploy a capital-light investment structure; utilising
the power of the PLC Brand, and the NetScientific balance sheet to
anchor future investments and achieve a multiplier effect by
attracting 3rd party investment for the portfolio companies.
NetScientific is headquartered in London, United Kingdom, and
was admitted to trading on AIM, a market operated by the London
Stock Exchange, in 2013 (website: www.netscientific.net ).
About Azima Trust
The Azima Family Trust holds various assets for its
beneficiaries, including Zahra Holdings and a minority shareholding
in NetScientific PLC. Farad Azima was a successful entrepreneur and
a philanthropist. He founded NetScientific in 2006 with investment
from his family's trusts, and was a member of the NetScientific
Board until 2013. He died in August 2020. Life Sciences were a
particular interest of Farad's. It is likely that investment in
this sector will continue to be a consideration for his trustees at
the Azima Trust.
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