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Creo Medical Group - Acquisition of Albyn Medical S.L.

RNS Number : 9510T
Creo Medical Group PLC
24 July 2020
 

 Creo Medical Group plc

("Creo" or the "Company")

 

Acquisition of Albyn Medical S.L.

Supplier of specialist healthcare products adds European commercial platform to Creo

 

Creo Medical Group plc (AIM: CREO), the medical device company focused on the emerging field of surgical endoscopy, announces the acquisition of Albyn Medical S.L. ("Albyn Medical"), a European specialist in the supply and manufacture of Gastroenterology, Urology and Endoscopy products to healthcare providers, for an equity value of €24.8m plus up to €2.7m of performance related consideration payable over the next two years.

 

Synergistic acquisition that provides immediate market access

With a sales and marketing team of nearly 40 people and a direct presence in Spain, France, Germany and the UK, the acquisition of Albyn Medical fits with the strategy set out by Creo at the time of its fundraising last year and provides it with a commercial and distribution platform to accelerate the development of its business in Europe. Albyn Medical focuses on gastrointestinal ("GI") products and the acquisition provides a direct route-to-market for Creo's full suite of CE marked GI advanced energy devices.

 

Acquisition synergies

·   Albyn Medical sells its own and third-party consumables and systems with 90% of revenues derived from GI endoscopy products

·   Albyn Medical is a respected name in GI endoscopy and Urology with commercial relationships with doctors and hospitals across key European territories

·   The acquisition adds a highly complementary product range, expanding the GI product suite and providing an opportunity to broaden into Urology

·   Following the recent expansion of the Creo team and in combination with Albyn Medical's sales and marketing footprint, the enlarged business will have a 175 strong team, with direct operations in five countries

·    Acquisition combines deep global intellectual property, innovation, engineering and a pioneering product range from Creo, with an extensive sales, service, logistics, production and export capability of Albyn Medical

 

Transaction highlights & Financials

·    Fixed equity value of €24.8m plus up to €2.7m of performance related consideration payable over the next two years in cash

·    As part of the transaction, Albyn Medical will retain €4.3m of net debt

·    Albyn Medical reported PBT of €1.7m and EBITDA of €2.4m for the year ended 30 September 2019. As at 30 September 2019, Albyn Medical had gross assets of €15.4m

·    As a well-established and stable business, Albyn Medical has remained profitable on a monthly basis during the current pandemic

·    Albyn Medical President, Luis Collantes, has a beneficial interest in 45.3% of Albyn Medical with Sodena, the financial instrument of the Government of Navarra for the development of business in the region owning a further 22.98% and Investment Fund Orza Gestión y Tenencia de Patrimonios, A.I.E. owning 29.94%

·    Luis Collantes will remain with the business, joining the Creo senior management team in a non-board capacity, and the enlarged group will benefit from his significant experience and market expertise.90% of the issued share capital of Albyn Medical has been acquired at closing with the remaining 10% to be acquired over the next two years for a consideration calculated against performance targets

·    Cash position of the enlarged Creo group following acquisition of £52.5m

·    The acquisition is considered to be a substantial transaction, pursuant to AIM Rule 12

 

About Albyn Medical (www.albynmedical.com)

Albyn Medical was established in 1985 in Scotland, originally developing computer based Urodynamics and GI Motility systems. Now based in Navarra, Spain and with additional operations in the UK, France and Germany, Albyn Medical specialises in the manufacture and supply of systems and consumables for the Urology / Gynaecology, and GI endoscopy markets. A key attraction of Albyn Medical is that it also distributes third-party products within these fields, either under its own label or as third party branded products. Albyn Medical has a total of 85 employees, including a 40 strong sales and marketing team to support sales in the UK, Spain, France and Germany, and an extensive international distributor network.

 

Albyn Medical's product range covers diagnostic, therapeutic and hygiene / cross-contamination control to customers including hospitals, hospital groups and doctors' offices across both state and private sectors. Its own brand of GI products includes a range of biopsy forceps, snares, catheters, tubes and valves, as well as distributing a wide range of diagnostic and therapeutic endoscopy devices. Albyn Medical also has a range of endoscope cleaning, sterilisation, and storage products, as well as endoscopic accessories for hospitals. GI products account for 90% of Albyn Medical's sales, with 10% of revenues derived from its own developed urology products and partner urology sales.

 

Over the last 18 years, Luis Collantes, Albyn Medical President, has succeeded in building Albyn Medical into a successful business, leveraging his energy and reputation in the industry in Europe to grow a resilient company, delivering great service and support to Albyn Medical's customers and a consistent and valuable business to Albyn Medical's suppliers. The Directors believe that the complementary nature of Creo's product range with Albyn Medical's product portfolio provides a clear opportunity to grow both businesses in the coming years.

 

Creo's suite of CE-marked advanced energy devices are optimised to utilise Bipolar radiofrequency (RF) and High frequency microwave (MW) energy for the core tissue effects of dissection, resection, haemostasis and ablation, and form the basis of four individual device platforms as detailed below:

 

1.  Speedboat™ device technology - Range of unique bipolar RF blades with integrated MW coagulation, the first device technology launched by Creo.

 

2.  SpydrBlade™ device technology - Tissue resection devices combining Speedboat resection capability with precise microwave coagulation - the only bipolar RF resection structure of which the Company is aware.

 

3.  MicroBlate™ device technology - Tissue ablation devices including MicroBlate Fine and MicroBlate Flex - the smallest microwave ablation devices of which the Company is aware.

 

4.  SlypSeal™ device technology - Range of haemostasis devices leveraging Creo's unique "Non-stick" haemostasis technology - the only non-stick advanced energy haemostasis technology of which the Company is aware.

 

Creo expects to introduce the devices into clinical practice and for commercialisation across Europe to commence in the second half of this year.

 

Luis Collantes, President of Albyn Medical, commented: "I am very pleased to join forces with Creo Medical as we enter a new exciting growth phase for our business. Over the last 25 years, we have established a world-class business focussed on the development of a portfolio of third party and own brand medical devices supplying a global client base of partners and distributors. Combining this with the exciting new advanced energy devices at the heart of Creo, provides an excellent opportunity to continue the work Albyn Medical has undertaken to date and to advance the commercial roll-out of Creo's complementary product range."

 

Craig Gulliford, CEO of Creo, commented: "Albyn Medical is an exceptionally good fit with Creo. The enlarged business brings together a wide range of highly complementary GI products, with an opportunity to broaden the portfolio into Urology, and provides us with an extensive marketing and sales capability to support our commercial presence in Europe and the roll-out of our innovative range of advanced energy devices. I am delighted to welcome Luis and his team to the Creo family and we are all looking forward to working together to radically transform the way flexible endoscopy is used in Europe."

 

This announcement contains inside information.

 

Enquires:

 

Creo Medical Group plc

www.creomedical.com

Richard Rees (CFO)

+44 (0)1291 606 005

 

 

Cenkos Securities plc

+44 (0)20 7397 8900

Stephen Keys / Cameron MacRitchie (NOMAD)

 

Michael Johnson / Russell Kerr (Sales)

 

 

 

Walbrook PR Ltd

Tel: +44 (0)20 7933 8780 or creo@walbrookpr.com

Paul McManus / Lianne Cawthorne 

Mob: +44 (0)7980 541 893 / +44 (0)7515 909 238 

 

About Creo Medical 

 

Creo Medical, founded in 2003, is a medical device company focused on the development and commercialisation of minimally invasive surgical devices, by bringing advanced energy to endoscopy.  The Company's mission is to improve patient outcomes by applying microwave and RF energy to surgical endoscopy.  Creo has developed CROMA, an electrosurgical Advanced Energy Platform that combines bipolar radiofrequency for precise localised cutting and microwave for controlled coagulation.  This technology provides clinicians with flexible, accurate and controlled surgical solutions. 

 

The Company's strategy is to bring its CROMA Advanced Energy Platform powered by its unique full spectrum kamaptive technology to market, enabling a suite of medical devices which the Company has designed, initially for the emerging field of GI therapeutic endoscopy, an area with high unmet needs. The CROMA Advanced Energy platform will be developed further for bronchoscopy and laparoscopy procedures. The Company believes its technology can impact the landscape of surgery and endoscopy by providing a safer, less-invasive and more cost-efficient option of treatment. An overview of the Creo Medical device technology portfolio can be seen here:

https://www.rns-pdf.londonstockexchange.com/rns/8918P_1-2020-6-14.pdf 

 

For more information about Creo Medical please see our website, www.creomedical.com

 

 


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