MEDICAL testing kit manufacturer IDS has made another multi-million pound acquisition which will transform the size of the business.
Just four weeks after securing its last purchase, IDS (Immunodiagnostic Systems), from South Tyneside, has bought French company Biocode Hycel in a £15.5m deal.
IDS recorded sales of just under £10m in the year to March 31, and employs around 65 staff, compared to its purchase, Biocode Hycel, which posted sales of around £8m last year and employs 132 staff.
The latest acquisition was identified because IDS already uses the ‘3x3’ instrument manufactured by Biocode Hycel and values it very highly.
The Belgian-French company has made a loss recently after its owner ceased trading following some regulatory problems in the US market, but can boast strong sales of some £8m.
So IDS seized the opportunity to buy Biocide Hycel and capitalise on the opportunity to sell its products to all the territories where IDS has subsidiaries – France, Germany and the US.
The deal will be paid for with cash of £7.4m and £8.1m in IDS shares. IDS also said yesterday it was placing five million new shares, to raise £12m, which will pay for the acquisition and provide some additional working capital.
Yesterday’s announcement follows hot on the heels of securing a new banking facility to help pay the £17m cost of buying Danish company NBD (Nordic Bioscience Diagnostics).
IDS finance director Paul Hailes said: “Biocode Hycel was a part of a business called Nichols Institute Diagnostics (NID).
“They had founded Biocode Hycel to develop an instrument for them but then NID ceased trading just when Biocode Hycel had almost finalised the instrument... so they had to find the cost themselves, which led to them generating a loss.
“They have around 12m of turnover in France and French speaking export markets. They are strong in haematology and biochemistry. We are looking to take their products and sell them through our subsidiaries.”
IDS already has four of Biocode Hycel’s 3X3 instruments at its Boldon base and will soon have a fifth.
Mr Hailes said: “We are very impressed by [the 3x3] so when the opportunity to buy the business came up, we took it with both hands.”
Biocode has four sites in Liège in Belgium and Massy, Rennes and Pouilly in France.
IDS has proposed that Alain Rousseau, the current chief executive of Biocode Hycel and the co-inventor of 3X3 instrument, should be appointed to the company’s board as engineering director on completion of the deal for Biocode acquisition.
IDS managing director Dr Roger Duggan said: “Our goal of becoming the world leader in automated bone and skeletal biomarkers is both enhanced and protected by these serial acquisitions.
“And we are confident that we can fill this important and expanding niche market.”