Im­muno­pre­cise to buy ModiQuest for $10.57-mil­lion

Stockwatch Daily - - HEALTH CARE - Dr. James Kuo re­ports

IM­MUNO­PRE­CISE AN­TI­BOD­IES Ltd. has signed a bind­ing let­ter of in­tent with ModiQuest Re­search BV whereby the com­pany has agreed to ac­quire all of the is­sued and out­stand­ing shares of ModiQuest.

The trans­ac­tion al­lows Im­muno­pre­cise to be­come a sin­gle-source provider of ser­vices across the full antibody-dis­cov­ery value chain (anti­gen de­sign, hit gen­er­a­tion, lead se­lec­tion, lead op­ti­miza­tion and lead char­ac­ter­i­za­tion) and to of­fer the full spec­trum of antibody pro­duc­tion method­olo­gies (li­brary-based tech­nolo­gies, hy­bridoma meth­ods, trans­genic an­i­mal-based plat­forms and sin­gle-B-cell-based tech­nol­ogy). Fur­ther­more, the ac­qui­si­tion en­hances the com­pany’s ca­pac­ity for gen­er­at­ing hu­man an­ti­bod­ies.

“In ac­quir­ing ModiQuest Re­search BV, Im­muno­pre­cise be­comes a lead­ing in­te­grated antibody so­lu­tions com­pany with global reach,” said Dr. James Kuo, chair­man and in­terim pres­i­dent of the com­pany.

ModiQuest

ModiQuest is a pri­vately held com­pany based in Oss, the Nether­lands, that spe­cial­izes in the gen­er­a­tion of mon­o­clonal an­ti­bod­ies against dif­fi­cult tar­get anti­gens. ModiQuest ap­plies pro­pri­etary tech­nolo­gies to all as­pects of the antibody-dis­cov­ery process in re­search and de­vel­op­ment, di­ag­nos­tic and ther­a­peu­tic ap­pli­ca­tions. Us­ing its pro­pri­etary ModiFuse (hy­bridoma elec­tro­fu­sion), ModiS­elect (B-cell se­lec­tion) and ModiPhage (phage dis­play) tech­nolo­gies, ModiQuest can gen­er­ate very large pan­els of mon­o­clonal an­ti­bod­ies from var­i­ous back­grounds in­clud­ing mouse , rat, rab bit, chicken, llama and hu­man, as well as trans­genic an­i­mals har­bor­ing the hu­man antibody gene reper­toire. ModiQuest serves clients in Europe, the United States, Asia and Rus­sia.

The trans­ac­tion is ac­cre­tive in both rev­enue and earn­ings and brings ad­di­tional sci­en­tific and man­age­ment ca­pac­ity.

Terms of trans­ac­tion with ModiQuest

Un­der the bind­ing let­ter of in­tent , the com­pany and ModiQuest have agreed to ne­go­ti­ate a de­fin­i­tive agree­ment whereby the com­pany will ac­quire all of the is­sued and out­stand­ing shares of ModiQuest for seven mil­lion eu­ros ($10.57-mil­lion), of which (A) 2.5 mil­lion eu­ros ($3,775,000) will be paid in cash on clos­ing, (B) 2.5 mil­lion eu­ros ($3,775,000) will be sat­is­fied by the is­suance of ap­prox­i­mately 6,622,807 com­mon shares of the com­pany on clos­ing, and (C) two mil­lion eu­ros ($3.02-mil­lion) in de­ferred pay­ments over a three-year pe­riod. The de­ferred pay­ments will be made in three equal in­stal­ments of cash and eq­uity to­talling 666,666 eu­ros ($1,006,665) on each an­niver­sary date fol­low­ing clos­ing of the trans­ac­tion. The de­ferred pay­ments will be pro­rated if the EBITDA of ModiQuest fails to equal the av­er­age EBITDA from the pre­vi­ous two years. Im­muno­pre­cise ex­pects to fi­nance the cash por­tion of the pur­chase price us­ing a con­vert­ible debt in­stru­ment.

The let­ter of in­tent also re­quires Jos Raats, a prin­ci­pal of ModiQuest, to en­ter into a three-year man­age­ment con­tract, which will in­clude non-so­lic­i­ta­tion and non-com­pe­ti­tion clauses, and Mr. Raats will pro­vide a min­i­mum of 60 per cent of full-time em­ploy­ment to ModiQuest un­der the man­age­ment con­tract. The com­pany has also agreed to ap­point one of the prin­ci­pal share­hold­ers of ModiQuest to its board of di­rec­tors.

The par­ties will be en­ti­tled to carry out due dili­gence of each other un­til Feb. 15, 2018. Upon the par­ties com­plet­ing due dili­gence to their rea­son­able sat­is­fac­tion, the par­ties will en­ter into the de­fin­i­tive agree­ment set­ting forth the terms and con­di­tions of the trans­ac­tion by Feb. 28, 2018.

We seek Safe Har­bor.

Erika Flores con­densed this news re­lease (erikaf@stock­watch.com).

Robert Beecroft, Guy Cham­pagne, Thomas D’Orazio, James Kuo, Gregory Stu­art Smith

(IPA) Shares: 47,143,459

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