Australian medical technology company LBT Innovations Limited (ASX: LBT), a leader in medical technology automation using artificial intelligence, has signed a binding agreement to acquire Hettich Holding Beteiligungs-und Verwaltungs-GmbH’s 50% shareholding of its Clever Culture Systems joint venture (CCS).
Following the acquisition, CCS will become a fully owned subsidiary of LBT with no outstanding debt owing to Hettich.
Key Points:
- Binding agreement signed to purchase Hettich’s 50% shareholding of CCS and Shareholder loans
- A$4.0m total consideration: A$1.0m Cash, 30.66m Shares and 8.0m Options at 25c
- LBT will assume 100% ownership of CCS, Hettich remain invested in APAS through LBT shares
- LBT revenue for each APAS instrument increases by 66%, reducing the time to expected cash breakeven
LBT has signed a Share and Loan Assignment Deed to acquire the 50% shareholding of its joint venture company CCS from Hettich for a total consideration of A$4.0m payable in cash, newly issued LBT Shares and LBT Options. The acquisition establishes CCS as a fully owned subsidiary of LBT. Following acquisition, LBT will have no outstanding debt to Hettich. LBT will have complete operational control of CCS for the commercialisation of LBT’s novel APAS® technology.
CCS was established in 2013 to fund the development and commercialisation of LBT’s APAS technology. Since then, there has been significant investment to complete the development of the APAS Independence instrument and launch the product for sale globally. With several key milestones achieved in the last 12-months, including the appointment of channel partners for sale of the instrument in the EU and US, the Company believe this is the opportune time to acquire 100% ownership of the CCS joint venture.
All key contracts will remain active, with no change of control provisions triggered as a result of the transaction.
The acquisition is expected to deliver the following strategic benefits for the company:
- Unlock value for LBT shareholders.Attractive transaction valuation and deal structure preserves LBT’s cash runway to deliver APAS commercialisation.
- Critical timing. Opportune time to acquire CCS with large development costs complete and momentum building in the market with channel partners. 10 Advanced Opportunities in the sales funnel.
- Improved path to breakeven. LBT’s share of revenue per instrument sold increases by 90% in the year of sale (66% over the life of the instrument), whilst operating costs increase by 17% in comparison.
- Cost management.Post-acquisition cost reduction plan expected to deliver a $0.8m reduction in expenditure in Clever Culture System’s budget for 2022.
This acquisition represents an important strategic outcome for the Company unlocking value for LBT shareholders,” LBT CEO and Managing Director, Brent Barnes, said.
“On completion, it will deliver LBT full control of CCS at a critical time in the commercialisation of the APAS® Independence. Ultimately, we will benefit from an increased share of margin from each APAS® instrument sold providing a faster path to breakeven for the Company.
“I’d like to thank Hettich’s owner, Klaus-Günter Eberle for his collaboration and support over many years. This consolidated ownership significantly simplifies the structure of CCS which we believe has potential benefits for all shareholders, including Hettich, who will become LBT’s largest shareholder.”
