Yourgene Health to Acquire Elucigene for £9.2M in Cash, Stoc

UK molecular diagnostics firm Yourgene Health said recently that it has agreed to acquire Elucigene for £9.2 million ($12.0 million) in cash and stock in a bid to bolster its presence in the noninvasive prenatal testing (NIPT) market.

To fund the transaction, Yourgene said it is planning to raise at least £10.0 million through the sale of roughly 97.5 million newly issued shares.

Manchester, England-based Elucigene develops in vitro diagnostics with a focus on oncology and reproductive health. Among its marketed products are tests for cystic fibrosis, prenatal aneuploidy, male infertility, and genetic diseases including thrombophilia. For the year ended Dec. 31, 2018, Elucigene had revenues of £3.6 million and adjusted EBITDA of £1.0 million, Yourgene said.

"The acquisition of Elucigene will strengthen Yourgene's product portfolio within reproductive health and produce cross-selling opportunities across our client bases," Yourgene CEO Lyn Rees said in a statement. "The combination of the businesses will immediately increase our commercial footprint to 57 territories, adding an additional 150 customers … into which we will aim to cross-sell our respective complementary products."

Earlier this month, Yourgene reported a 45 percent jump in its fiscal 2018 revenues, driven in part by growth in its NIPT and oncology research services, and said it had roughly £1.3 million in cash at the end of the fiscal year.

Yourgene said it will acquire Elucigene for £6.3 million in cash and £2.9 million in equity in the form of 24.6 million new shares issued at 11.7 pence each. To raise the money for the cash portion of the deal, Yougene intends to sell the approximately 97.5 million new shares at 10.25 pence apiece to institutional investors for gross proceeds of £10.0 million, although its board may increase the fundraise to £11.8 million.

The acquisition is expected to be immediately accretive to earnings, Yourgene said.