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Small Cap M&A Round-Up: 6 March

06 March 2009

The weekly round-up of mergers, acquisitions and disposals from SmallCapNews.co.uk

Care and share
Medical company Axis-Shield paid €1.2m for the German distribution rights for its point-of-care in-vitro diagnostics products. The rights were snapped up from Progen Biotechnik GmbH of Heidelberg, Germany, in a deal that is part of Axis-Shield's strategy to set up direct distribution in key countries such as Germany. Apparently Germany has the potential to become the largest PoC market in Europe for the company’s product range.

Braemar buys
AIM quoted real estate fund and management group Braemar took out Manchester Ground Rent Company Ltd (MGRC) in a cash deal worth £95,000 plus the assumption of MGRC's debt of £315,000. MGRC owns the long leasehold of Castlegate, a block of 84 apartments in Castlefield, Manchester.

Capital idea
Real estate group Capital & Regional reported that the X-Leisure Fund (where it holds a 19.4% stake and is the property asset manager) had agreed the sale of the 02 Centre, Finchley Road. The property has been sold to Matterhorn Capital for £92.5m representing a net initial yield of 7.83%. C&R said the sale was part of a broader strategy to strengthen the financial base of the X-Leisure Fund.

Book worm
In a move designed to boost its intellectual property assets, AIM-listed media company Coolabi acquired three literary estates. The deal saw it get its hands on the works of Eric Ambler, Michael Innes and John Creasey, from Owatonna Media International Ltd. An £85,000 initial fee is being funded from existing facilities.

Paws for thought
Veterinary market consolidator CVS got its paws on Beechwood Veterinary Hospital, a single site small animal surgery in Doncaster. The dogged acquirer said the deal would complement its existing practices in the Yorkshire area. Purchase figures were not disclosed, but CVS said it was funding the move through internal cash.

Dragon’s den
Dragon-Ukrainian Properties & Development, one of the largest AIM-listed real estate investment companies focused on investments in Ukraine, closed a deal to buy 38 residential properties in Kiev. The group said the US$12.8m deal came after falling market prices in the country had led to some notable purchasing opportunities.

Full flavour
Israeli food ingredients business Frutarom Industries agreed a deal to buy US company Flavors Specialties Inc (FSI) for up to US$17.2m. Frutarom said the debt-funded acquisition was a strategic move to strengthen its geographical presence in the flavours field in the US.

Strategic realignment
Biotechnology group NextGen sold its non core electrophoresis business to Sigma Aldrich Corp, based in Missouri, US, for $0.56m in cash, of which $0.179m was assets, and an 8% royalty on global sales for three years payable in cash. This disposal follows the sale of NextGen’s other non core 'gene to protein' automation and software business late last year and completes a strategic realignment of the group.

On reflection
Reflec, the diversified AIM listed group, took control of is US joint venture operation Reflec USA by acquiring it for US$2m from the now-resigned president of the business, Peter Smith. Reflec said the asset acquisition was part of a strategy to market its technology-based reflective fabrics worldwide either through its own branded products or through other channels.

Patent protected
Intellectual property and patents specialist RWS Holdings moved to boost its expertise in the medical and pharmaceutical sectors by acquiring Communicare Ltd in a cash deal worth £2.1m. RWS said it was ready to spend cash on purchases which offered demonstrable growth prospects and enhanced shareholder value.

All at sea
European convenience foods group Uniq agreed to sell its UK chilled fish business, Pinneys of Scotland, to Foodvest subsidiary The Seafood Company Ltd for an initial cash fee of around £1m. Uniq said it wanted to focus on convenience food businesses with the most potential for significant profit improvement and shareholder value creation. Proceeds from the sale will be used to reduce bank borrowings.

Moving on
Irish support services outfit Veris agreed to sell its moving and storage division to Capstar Ltd, a company controlled by Niall Doris, for €74,304 in cash. Following the disposal Veris said it would focus on its facilities and property management divisions.

Norwood set to sell
Biotechnology group Norwood Immunology has set out the terms of a deal to sell its Bestewil division to US group Mymetics. The sale is part of an effort by Norwood to raise cash and to focus on its core operations of developing and commercialising technologies connected with stem cell services. With this in mind, the company indicated that it was also looking to secure its future by selling its virosomal vaccine development business.

Go for broke
WH Ireland announced plans to merge with fellow stockbroking business Blue Oar in a move that values Blue Oar at £16.2m. The deal has the backing of Evolve Capital, which recently acquired a 64.9% stake in Blue Oar. WH Ireland said the deal would create a leading AIM advisory group with a significant number of corporate clients.

York talks
Responding to recent movements in its share price, York Pharma confirmed that it had made an approach to a potential offeror which may or may not lead to an offer being made for the company. Discussions over a deal are thought to be at an early stage.