RNS Number:2910M
Ferraris Group PLC
13 June 2003
Not for release, distribution or publication in or into the USA, Canada,
Ireland, Australia or Japan
For Immediate Release 13 June 2003
FERRARIS GROUP PLC
Proposed acquisition of Bionostics for $31.0 m (#18.7 m), Placing and Open Offer
at 96 p per share to raise #7.3 m and Vendor Placing to raise #5.0 m
The Board of Ferraris Group plc ("Ferraris" or "the Company"), the medical
diagnostics and life sciences group, today announces that it has conditionally
agreed to acquire Bionostics Inc. ("Bionostics") for a total consideration of
$31.0 m (#18.7 m). The acquisition will be financed in part in cash, which is
being raised through a fully underwritten placing and open offer to raise #7.3 m
before expenses. The balance of the consideration will be satisfied through a
vendor placing of new Ferraris shares to raise $8.3 m (#5.0m), and the issue to
the Bionostics vendor of $10.3 m (#6.2 m) (at the placing and open offer price)
of new Ferraris shares and $5.0 m (#3.0 m) of vendor loan notes.
Bionostics, a private US company, is a leading provider of liquid quality
control standards used to confirm the performance of medical testing devices.
These are proprietary formulations, predominantly used in blood-based
diagnostics, which are provided to the customer in a pre-packaged, ready to use
form. Its customers include many of the world's leading diagnostics companies.
In the financial year ended 31 December 2002, Bionostics had turnover of #11.4 m
and profits of #2.0 m before taxation and exceptional costs of #0.25 m related
to the proposed disposal of the business. Turnover and pre-tax profits grew at
compound annual growth rates of 37 per cent. and 53 per cent. respectively from
2000 to 2002. At 31 December 2002, Bionostics had net assets of #3.3 m.
Highlights are as follows:
- Transforms Ferraris into a high margin, global diagnostics company
- Positions enlarged Ferraris Group in key critical care diagnostic
sectors of cardio, pulmonary and blood
- Provides strong market positions in specialised diagnostic markets
- Offers attractive growth opportunities in the rapidly growing diabetes
monitoring market
- Potential synergies between Ferraris's clinical trials services and
Bionostics's laboratory statistical services businesses
- De-emphasises the Life Sciences division
- Strengthens the corporate management team
- Bionostics vendor to become approximately 13 per cent. shareholder in
the enlarged Ferraris Group
- Bruce Blessington, President and CEO of Bionostics, to join Ferraris
Board
- Mannheim Holdings LLC, a privately held international investment
company based in New York, to subscribe for #5.0 m of new Ferraris shares
in the vendor placing, with Dr Gerald Moller also joining the Ferraris
Board
Commenting on today's announcement, Steven Mills, Chief Executive Officer of
Ferraris, said:
"This is a company transforming acquisition for Ferraris and validates its
future strategy for investors. It adds critical mass and increases our presence
in the key United States market. Bionostics brings with it a blue chip customer
list, a high quality management team and provides an entry point into the in
vitro diagnostics controls market, which is estimated at approximately $400-500m
per annum. The enlarged Ferraris Group has a number of growth opportunities and
the Ferraris Board is optimistic about prospects."
"To coincide with the acquisition, Kevin d'Silva has resigned from the Board to
pursue his other interests. Kevin has been Group Managing Director since 1998
and has been part of the team that has established Ferraris as one of the market
leaders in the cardio-respiratory diagnostics market. His contribution has been
significant and I would like to record the thanks of all connected with the
Group. My colleagues and I wish him well."
Ferraris was advised by Nomura International in relation to the acquisition of
Bionostics. The placing was arranged by Investec Securities and Nomura
International, Ferraris's joint stockbrokers, and underwritten by Nomura
International.
Enquiries
Ferraris Group plc
Steven Mills, Chief Executive Today: 020 7786 9600
Thereafter: 0121 782 6000
Nomura International
Charles Spicer/Steve Adkin Tel: 020 7521 2000
Investec
Keith Anderson/Andrew Craig Tel: 020 7597 5970
Binns & Co PR Ltd
Peter Binns/Sam Allen Tel: 020 7786 9600
Nomura International plc is acting exclusively for Ferraris in relation to the
Acquisition and the Placing and the Open Offer and is not advising any other
person or treating any other person as its client in relation thereto, and will
not be responsible to any person other than Ferraris for providing the
protections afforded to its clients nor for providing advice in relation to the
Acquisition, the Placing or the Open Offer.
Investec Securities is acting exclusively for Ferraris in relation to the
Placing and is not advising any other person or treating any other person as its
client in relation thereto, and will not be responsible to any person other than
Ferraris for providing the protections afforded to its clients nor for providing
advice in relation to the Placing.
The Directors and Proposed Directors (being Bruce Blessington and Dr Gerald
Moller) of Ferraris accept responsibility for the information contained in this
announcement. To the best of the knowledge and belief of the Directors and the
Proposed Directors (who have taken all reasonable care to ensure that such is
the case) the information contained in this announcement is in accordance with
the facts and does not omit anything likely to affect the import of such
information.
This announcement does not constitute or form part of any offer or invitation to
sell or issue, or the solicitation of any offer to subscribe for, the New
Shares, the Vendor Placing Shares or the Consideration Shares in any
jurisdiction in which such offer or solicitation is unlawful. The New Shares,
the Vendor Placing Shares and the Consideration Shares have not been, and will
not be, registered under the US Securities Act of 1933 (as amended), under the
securities laws of any state of the US or under the applicable securities laws
of Canada, Ireland, Australia or Japan. Accordingly, unless an exemption under
any applicable law is available, the New Shares, the Vendor Placing Shares and
the Consideration Shares may not be offered, sold, transferred, taken up or
delivered, directly or indirectly, in the US, Canada, Ireland, Australia or
Japan or any other country outside the United Kingdom where such distribution
may lead to a breach of any legal or regulatory requirement.
FERRARIS GROUP PLC
Proposed acquisition of Bionostics for $31.0 million (#18.7 million) and Placing
and Open Offer at 96 p per share to raise #7.3 million and Vendor Placing to
raise #5.0 million
Introduction
The Board of Ferraris today announces that Ferraris has conditionally agreed to
acquire the entire issued share capital of Bionostics for a total consideration
of $31.0 million (approximately #18.7 million) (the "Acquisition"). The
consideration will be satisfied by the payment of $7.4 million (#4.4 million) in
cash, which is being raised through a fully underwritten placing and open offer
to raise #7.3 m, the issue to the Bionostics vendor of $10.3 million (#6.2
million) of new Ferraris shares (the "Consideration Shares") and $5.0 million
(#3.0 million) of loan notes, and a vendor placing of 5,208,333 new Ferraris
shares (the "Vendor Placing Shares") to raise $8.3 million (#5.0 million). The
consideration is subject to downward adjustment on a $ for $ basis to the extent
that the financial indebtedness of Bionostics at completion exceeds $2.2
million. $3.5 million of the cash element of the consideration will be paid into
an escrow account to establish a source of payment to satisfy indemnification
obligations of the Bionostics vendor.
Bionostics, a private US company, is a leading provider of liquid quality
control standards used to confirm the performance of medical testing devices.
These are proprietary formulations, predominantly used in blood-based
diagnostics, which are provided to the customer in a pre-packaged, ready to use
form. Its customers include many of the world's leading diagnostics companies.
In the financial year ended 31 December 2002, Bionostics had turnover of #11.4
million and profits of #2.0 million before taxation and exceptional costs of
#0.25 million related to the proposed disposal of the business. At 31 December
2002, Bionostics had net assets of #3.3 million.
Ferraris proposes to finance the cash element of the consideration through a
placing and open offer (the "Placing and Open Offer") to raise approximately
#7.3 million (before expenses) through the issue of 7,619,902 new Ferraris
shares (the "New Shares") at an issue price of 96 pence per share. The Placing
has been arranged by Investec Securities and Nomura International, Ferraris's
joint stockbrokers. The Placing and Open Offer have been fully underwritten by
Nomura International under the terms of a placing agreement (the "Placing
Agreement").
As described above, part of the consideration will be satisfied by a vendor
placing to raise $8.3 million (#5.0 million) through the issue of the Vendor
Placing Shares at 96 pence per share. The Vendor Placing Shares have been placed
with Mannheim Holdings LLC ("Mannheim"), a privately held international
investment company based in New York.
The vendor of Bionostics has agreed that, subject to certain limited exceptions,
it will not sell or dispose of any of the Consideration Shares without
Ferraris's consent before the earlier of (i) the publication of Ferraris's
audited accounts for the year ending 31 August 2004 and (ii) 13 January 2005.
Mannheim has indicated its intent to be a long term investor in the Company and
has also agreed that, subject to certain limited exceptions, it will not sell or
dispose of any of the Vendor Placing Shares without Ferraris's consent during
the same period.
Background to and benefits of the Acquisition
Since 1996, the directors of Ferraris (the "Directors") have pursued a strategy
of developing the Group through both organic growth and acquisitions. Following
the disposal of the engineering division in June 2002, the Group is now wholly
focused on its core areas of medical diagnostics and lifescience specialist
components primarily for the healthcare industry. Three significant
acquisitions, PDS Group, Reynolds Medical Group and Del Mar, have been made
in the Medical Diagnostics division since 2000. Both PDS Group and Reynolds
have been earnings enhancing for shareholders and Del Mar, acquired in January
of this year, is performing in line with expectations. In particular, the Group
focuses on niche areas of non-invasive medical diagnostics, where an in-depth
understanding of its chosen markets and well targeted product development
capabilities allow the Group to establish itself as a leading provider of high
quality cardio-respiratory products and services. The Directors believe that
the acquisition of Bionostics, as a rapidly growing, well-established provider
of high quality speciality products and services to many of the world's leading
diagnostic companies, is an excellent fit with the Group's strategy. The
acquisition would mean that Ferraris would have niche businesses in the critical
care segments of cardio, pulmonary and blood diagnostics. In particular, the
Directors believe that Bionostics offers the following attractions:
Entry point into the in vitro diagnostic controls market
Bionostics has established itself as a reliable, quality supplier to many of the
largest players in the world in vitro diagnostics (IVD) market. Although the
worldwide market for IVD speciality and clinical diagnostic products and
reagents was estimated to be approximately $3 billion in 2001, Bionostics limits
its activities to a subset of this market - quality controls and calibrators -
estimated at $400-$500 million in 2001. The Directors believe that the
acquisition will provide a valuable entry point for Ferraris into this market
and that there will be opportunities to benefit from the established reputation
and customer base of Bionostics in order to grow the enlarged Group's activities
in the wider IVD controls market. The Directors believe that original equipment
manufacture (OEM) customers consider that the development and manufacture of
quality control standards is not part of their core competencies and hence will
continue to prefer to outsource these activities and in so doing provide growth
for Bionostics. Moreover, the Directors believe that the applications of IVD per
se, and the related controls, are themselves set to multiply as a result of the
increase in the use of protein based diagnostic tools anticipated over the next
few years. In particular, the point of care diabetic IVD market should
experience continued growth as the rate of obesity continues to climb in major
markets. The Directors therefore expect that the IVD controls market will
continue to grow on the back of increased demand and that Bionostics and
Ferraris will be well positioned to take advantage of this growth. Bionostics is
also developing additional products in the area of haemoglobin A1C and is
looking to further areas such as coagulation controls in respect of new
products.
Strong market positions in specialised markets
Since it was founded in 1982, Bionostics has successfully established itself as
one of the leading suppliers of quality control solutions to the worldwide IVD
industry. It has developed strong relationships with many of the world's leading
diagnostic companies because, the Directors believe, of its intellectual
property in formulations and processes and commitment to meeting the high levels
of quality demanded by its customers. Bionostics has become established as the
pre-eminent supplier of blood gas and critical care quality controls. The
Directors believe that Bionostics's market strategy complements Ferraris's own
focus on niche markets and high quality products and services.
Expanding presence in diabetes monitoring market
Approximately four years ago Bionostics began to produce quality control
solutions for use in the rapidly expanding diabetes monitoring market. Since
that time it has become one of the leading suppliers in this market, which is
growing at approximately 15 per cent. per annum. Bionostics works with both
established and emerging diabetes monitoring companies. The Directors believe
that Bionostics is well positioned to benefit from the expansion in this
important diagnostic market.
Growth opportunities for statistical services business
Bionostics has recently started to market quality control statistical services
that allow clinical laboratories to monitor the performance of their diagnostic
instruments by comparing them online with results from other laboratories.
Bionostics has recently completed the development of the current version of this
system, which is designed specifically to meet the needs of its OEM customers.
Bionostics now has contracts with certain OEM customers and the Directors
believe that there are opportunities to sell this service to other of
Bionostics's OEM customers.
Statistical services, clinical trials synergies
The acquisition of a facility specialising in blood diagnostics should enable
Ferraris to extend facilities it currently offers to the clinical trials sector
where its present strengths are in cardio and respiratory diagnostics.
Bionostics's statistical services business operates on a similar platform as the
collection and validation of data is organised within the clinical trials
business of Ferraris, in that it is web-based and offers real-time/online data
collection facilities. The Directors also believe that there are opportunities
for Bionostics's direct sales team in hospitals to cross-sell a number of
Ferraris's existing range of medical diagnostic products.
Established product development expertise
Bionostics has a track record of successfully developing new products to meet
the quality control and calibration requirements arising from the development of
new diagnostic instruments and tests. The Directors believe that this expertise
is highly complementary with Ferraris's focus on product development across its
existing business areas.
Proven management team and staff
Bionostics has a well-established, experienced management team which will be
retained and incentivised following completion of the Acquisition. The members
of the senior management team have been with Bionostics for on average more than
six years and many of them also have significant experience in the broader
medical diagnostics industry, gained prior to joining Bionostics. In particular,
Bionostics, through its RNA Medical business, also brings a US direct hospital
sales force which should provide enhanced cross-selling capabilities to
Ferraris. The Directors believe that this proven team will be a valuable
addition to the Group as it seeks to expand its diagnostics businesses.
Purpose-built and expandable manufacturing and office facilities
Bionostics operates out of a single 45,000 sq. ft. leased facility in Devens,
Massachusetts, USA. This recently constructed new facility has been designed to
have an efficient layout and offers scope for future expansion, if required, to
90,000 sq. ft.
Details of the Placing and Open Offer
The Company is proposing to raise approximately #7.3 million (approximately #6.8
million after expenses of the Placing and the Open Offer) by the issue of the
New Shares at 96 pence per share in the Placing and Open Offer. 3,809,951 of
these new shares have been placed firm with certain institutional investors to
broaden the Company's existing shareholder base. Qualifying shareholders will be
given the opportunity to apply under the Open Offer for New Shares at 96 pence
per share, free of expenses, pro rata to their existing holdings of Ferraris
shares on the record date (9 June 2003) on the following basis:
1 New Share for every 8 existing Ferraris shares
Fractional entitlements to the new shares in the Open Offer will not be
allocated but will be disregarded and entitlements rounded down to the nearest
whole number of new shares. Any fractional entitlements that would have
otherwise arisen will be aggregated and issued under the Placing for the benefit
of the Company.
The latest time and date for acceptance and payment in full under the Open Offer
is expected to be 3 p.m. on 4 July 2003. The Placing and the Open Offer are
conditional, inter alia, upon the Placing Agreement having become unconditional
and not having terminated in accordance with its terms. If the conditions of the
Placing Agreement are not fulfilled or, if capable of waiver, waived on or
before 9 July 2003, or such later date, being not later than 21 July 2003, as
the Company and Nomura shall agree, application monies are expected to be
returned (at the applicant's risk), without interest, within 14 days thereafter.
A circular to Ferraris shareholders, comprising a prospectus and listing
particulars, produced by the Company and containing details of the Acquisition,
the Placing and the Open Offer together with the Application Form and Form of
Proxy are expected to be posted to Qualifying Shareholders today. A copy of the
circular has also been submitted to the UK Listing Authority ("UKLA"), and will
shortly be available for inspection at the UKLA's Document Viewing Facility,
which is situated at: Financial Services Authority, 25 The North Colonnade,
Canary Wharf, London E14 5HS, Tel no: 020 7676 1000.
The New Shares, the Vendor Placing Shares and the Consideration Shares will,
when issued and fully paid, rank pari passu with the existing issued Ferraris
shares except that they will not have entitlement to the interim dividend for
the year ending 31 August 2003 of 2.2 pence per share announced on 23 April 2003
and due for payment on 28 July 2003. The Bionostics vendor has also agreed to
waive any final dividend payable for the financial year ended 31 August 2003 in
respect of the Consideration Shares. Application has been made to the UKLA for
the New Shares, the Vendor Placing Shares and the Consideration Shares to be
admitted to the Official List. Application has also been made to the London
Stock Exchange for the New Shares, the Vendor Placing Shares and the
Consideration Shares to be admitted to trading on its market for listed
securities. It is expected that admission to listing of such securities will
become effective and dealings on the London Stock Exchange will commence on 9
July 2003.
Shareholders should be aware that the Open Offer is not a rights issue and that
entitlements to Open Offer Shares will not be tradable or sold in the market for
the benefit of those who do not apply under the Open Offer. Application Forms
are personal to shareholders and may not be transferred except to satisfy bona
fide market claims.
Board
On completion of the Acquisition, Bruce Blessington, the President and CEO of
Bionostics will be engaged as an executive director of the Company for a period
of 2 years at an annual fee of #14,000. He will also be engaged as President and
CEO of Bionostics and Chief Operating Officer of the Company for an initial term
of two years with a basic salary of $250,000 per annum. He will be paid a cash
bonus of $100,000, in respect of his previous service, on completion of the
Acquisition. He will be entitled to receive a further cash bonus of up to
$200,000 subject to certain performance and other conditions payable in 2005.
Also on completion of the Acquisition, Dr Gerald Moller will join the Board as a
non-executive director. Dr Moller, who is now a member of the Mannheim Holdings
LLC Advisory Board, was formerly CEO of Boehringer Mannheim and has extensive
experience of the global healthcare industry. Dr Moller will be engaged for a
period of 2 years and at an annual fee of #30,000 per annum. In addition, the
Company will engage Dr Moller to provide additional consultancy services of a
value of not less than #30,000 per annum, the nature and timing of such services
to be agreed between the Company and Dr Moller.
Jonathan North, a non-executive director of the Company, has indicated to the
Board that he intends to step down from this position with effect from the
conclusion of the Company's next annual general meeting. The Board wishes to
thank Mr North for his significant contribution to the Company.
To coincide with the Acquisition, Kevin d'Silva resigned from the Board on 12
June 2003 with immediate effect to pursue his other interests. Kevin has been
Group Managing Director since 1998 and has been part of the team that has
established Ferraris as one of the market leaders in the cardio-respiratory
diagnostics market. His contribution has been significant and the Board would
like to record the thanks of all connected with the Group and wish him well.
Current trading and prospects of the enlarged Ferraris Group
Since 28 February 2003, the end of the first half of the current financial year,
the Medical Diagnostics division has continued to deliver encouraging results in
line with expectations. Integration of the recent acquisitions (Hertford Medical
International Limited, PiKo Healthcare Products Inc. and Del Mar Medical
Systems, LLC) is progressing on target. The clinical trials group within
Ferraris is now operating as a single unit and is bidding successfully on a
global basis for combined cardio and pulmonary work.
As previously announced, the markets that the Life Sciences division serves
continued to suffer in the first half of the financial year. This trend has
persisted since 28 February 2003 and, as a result, this division has continued
to perform below management expectations. The Directors believe that factors
such as the downturn in the cyclical semiconductor market and extended lead
times on many contracts involving sizeable capital investment by customers
support the strategy of seeking to reduce the proportion of Group income
dependent upon those markets. The division continues to pursue a number of new
business enquiries to take additional market share. The Directors believe that a
proportion of these will be converted into firm orders for completion in the
current financial year.
Trading at Bionostics since 31 December 2002, the end of its last financial
year, has been ahead of expectations. Overall, the Directors are optimistic for
a satisfactory outcome for the enlarged Ferraris Group for the current financial
year.
Extraordinary General Meeting
An Extraordinary General Meeting is to be held at 10.00 a.m. on 7 July 2003 at 2
Gresham Street, London EC2V 7QP, at which three ordinary resolutions and a
special resolution, necessary to implement the Acquisition, the Placing and the
Open Offer, will be proposed.
Given the current level of non-executive Directors' fees and the proposed
appointment of Dr Moller as an additional non-executive director, the Directors
expect the #100,000 limit on total ordinary remuneration payable to the
non-executive Directors (set out in regulation 105 of the articles of
association of the Company) to be exceeded this year. The Directors therefore
propose that the current limit be increased to #200,000. An ordinary resolution
to this effect will be proposed at the EGM.
Enquiries
Ferraris Group plc
Steven Mills, Chief Executive Today: 020 7786 9600
Thereafter: 0121 782 6000
Nomura International
Charles Spicer/Steve Adkin Tel: 020 7521 2000
Investec
Keith Anderson/Andrew Craig Tel: 020 7597 5970
Binns & Co PR Ltd
Peter Binns/Sam Allen Tel: 020 7786 9600
Dr Moller is currently a director of Powderject Pharmaceuticals plc, Morphosys
AG and HBM BioCapital Management GmbH. In the last five years, he was also a
director of November AG. He is not, and has not been within the last five years,
a director of any other publicly quoted company. Mr Blessington is not, and has
not been within the last five years, a director of any publicly quoted company.
There are no details to be disclosed in relation to either Dr Moller or Mr
Blessington under paragraphs 6.F.2(b) to (g) of the Listing Rules.
Nomura International plc is acting exclusively for Ferraris in relation to the
Acquisition and the Placing and the Open Offer and is not advising any other
person or treating any other person as its client in relation thereto, and will
not be responsible to any person other than Ferraris for providing the
protections afforded to its clients nor for providing advice in relation to the
Acquisition, the Placing or the Open Offer.
Investec Securities is acting exclusively for Ferraris in relation to the
Placing and is not advising any other person or treating any other person as its
client in relation thereto, and will not be responsible to any person other than
Ferraris for providing the protections afforded to its clients nor for providing
advice in relation to the Placing.
The Directors and Proposed Directors (being Bruce Blessington and Dr Gerald
Moller) of Ferraris accept responsibility for the information contained in this
announcement. To the best of the knowledge and belief of the Directors and the
Proposed Directors (who have taken all reasonable care to ensure that such is
the case) the information contained in this announcement is in accordance with
the facts and does not omit anything likely to affect the import of such
information.
This announcement does not constitute or form part of any offer or invitation to
sell or issue, or the solicitation of any offer to subscribe for, the New
Shares, the Vendor Placing Shares or the Consideration Shares in any
jurisdiction in which such offer or solicitation is unlawful. The New Shares,
the Vendor Placing Shares and the Consideration Shares have not been, and will
not be, registered under the US Securities Act of 1933 (as amended), under the
securities laws of any state of the US or under the applicable securities laws
of Canada, Ireland, Australia or Japan. Accordingly, unless an exemption under
any applicable law is available, the New Shares, the Vendor Placing Shares and
the Consideration Shares may not be offered, sold, transferred, taken up or
delivered, directly or indirectly, in the US, Canada, Ireland, Australia or
Japan or any other country outside the United Kingdom where such distribution
may lead to a breach of any legal or regulatory requirement.
Notes to Editors
Ferraris Group
Ferraris is an international provider of specialist, high value-added medical
diagnostic products and services and life science components primarily to the
medical industry. Through its operations in Europe and North America, it
supplies a wide range of healthcare providers, as well as many of the world's
leading pharmaceutical, diagnostic and medical technology companies. In the six
months ended 28 February 2003, Ferraris reported turnover of #30.1 million and
an operating profit (pre goodwill) of #2.72 million. Ferraris currently employs
approximately 780 full time employees.
Ferraris operates through two divisions - Medical Diagnostics and Life Sciences.
The Medical Diagnostics division designs, manufactures, distributes and markets
high quality instruments and consumables used in cardiac and respiratory
diagnosis and accounted for approximately 69 per cent. of the Group's profits
before goodwill and exceptional items from continuing operations in the first
half of the current financial year. Many of the division's products hold leading
positions within their particular markets and are widely regarded as utilising
state of the art technology. The Life Sciences division, which accounted for the
balance of profit from continuing operations in the same period, designs,
manufactures and markets a range of specialist technology components used in
medical diagnostics, drug discovery and other scientific and industrial
applications.
Ferraris has carried out a number of acquisitions over recent years to
strengthen its position in the medical
diagnostics market. On 28 January 2003, Ferraris acquired the rights to PiKo,
the world's smallest peak flow
monitor. On 6 January 2003, Ferraris acquired the business of Del Mar Medical
Systems LLC, a major US supplier of ambulatory cardiac monitoring devices. In
August 2002, Ferraris acquired Hertford Medical International, a specialist
provider of cardiac diagnostic services for the clinical trials industry. In May
2001, Ferraris acquired Reynolds Medical Group Limited, one of Europe's leading
specialists in the design, production and distribution of non-invasive
cardiovascular diagnostic equipment, expanding the Group's product range and
product development capabilities and making Ferraris one of the leaders in the
supply of ECG equipment in Europe.
Bionostics
Bionostics, a private US company, is a leading specialist developer and
manufacturer of liquid quality control solutions that are used to confirm the
accuracy and performance of medical diagnostic testing devices. These are
proprietary formulations, protected by patents and trade secrets, which are
provided to the customer in a pre-packaged, ready to use form. Its customers
include many of the world's leading diagnostics companies.
Bionostics has operated as an independent, privately-owned company since it was
founded in 1982 and in 2002 relocated to a new corporate headquarters and
manufacturing facility in Devens, Massachusetts, USA. As at 30 April 2003,
Bionostics has 109 full time employees.
In the financial year ended 31 December 2002, Bionostics had turnover of #11.4
million (2001: #9.8 million) and profits before taxation of #1.7 million (2001:
#0.8 million). In the financial year ended 31 December 2002, Bionostics had
exceptional costs of #0.25 million related to the proposed disposal of the
business. Before such exceptional costs, Bionostics had pre-tax profits of #2.0
million. At 31 December 2002, Bionostics had net assets of #3.3 million.
Products and markets
Bionostics participates in the worldwide in vitro diagnostics (IVD) market,
which was estimated to amount to $22 billion in 2001. The overall worldwide IVD
controls market was estimated to be approximately $3 billion in 2001 and the
Directors estimate that the controls and calibration sub-sector in which
Bionostics operates is worth approximately $400-500 million per annum.
Bionostics's products and services can be divided into the following categories:
Blood gas and critical blood analyte quality control
Bionostics produces a range of quality control solutions for the instruments
that are used in hospitals and laboratories to test the levels of oxygen and
carbon dioxide gas in the blood. It also has a range of quality control
solutions for instruments used to test for other key components in blood,
including electrolytes, metabolites and haemoglobin. Bionostics focuses on
intensive (critical) care diagnostics. As a result of its activities in this
area, Bionostics has established itself as the world's largest manufacturer of
critical blood analyte quality controls. In particular, Bionostics has captured
85% share of the global blood gas market.
Glucose monitoring controls for the diabetes market
Diabetes is an increasingly common chronic disease and is the highest growth
sector of the IVD market. In the US, it is a regulatory requirement that every
glucose testing device be supplied with a control solution to allow the patient
to confirm that the device is functioning properly. Bionostics has been
supplying quality control solutions in the glucose testing area since 1999 and
is now the largest manufacturer of glucose controls for diabetes management with
a 45% market share. Bionostics produces control solutions for a wide range of
point-of-care glucose testing devices commonly used by diabetes patients in the
US and Europe.
Inter-laboratory statistical services
Bionostics also provides quality control statistical services that allow
clinical laboratories to monitor the performance of their diagnostic instruments
by comparing them online with results from the use of Bionostics's controls on
similar instruments in other laboratories.
Customers
Bionostics's primary customers are the original equipment manufacturers (OEMs)
that produce the diagnostic instruments and reagents that are used to carry out
diagnostic tests. In the financial year ended 31 December 2002, 86 per cent. of
Bionostics's revenues came from OEMs. Bionostics's OEM customers currently
include many of the world's largest diagnostics companies, who supply
Bionostics's products to clinical laboratories worldwide. Bionostics's strategy
is to develop stable, long term relationships, averaging 14 years, with its OEM
customers to allow it, amongst other things, to produce reliable forecasts of
likely demand from these customers.
Product development
Competition amongst diagnostic instrument OEMs leads to the development of new
diagnostic instruments and new types of diagnostic tests. Bionostics's strategy
is to maintain a close working relationship with its OEM customers and offer
them a comprehensive product development service to meet their needs for new
quality control solutions. Once an OEM's needs have been identified, Bionostics
takes responsibility for designing the specific formulation for the control
solutions and carries out a series of tests in collaboration with the customer
to verify theirstability. It then develops and validates the manufacturing
process for the new solutions and makes thenecessary submissions to the US and
other regulatory authorities.
Manufacturing
Bionostics carries out all the key stages of the control solution manufacturing
process, from formulation of the bulk liquid through to packaging of the final
product for customer delivery. It has the capacity to fill approximately 300,000
ampoules and 60,000 vials per day, carries out in-process and final release
testing as well as sterilisation of the finished products.
This information is provided by RNS
The company news service from the London Stock Exchange
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