Healthcare firm planning to raise £7.5m to buy Galway-based biodegradable plastics business
Dublin-based personal healthcare firm Integumen, listed on London's AIM, is planning to raise £7.5m as it buys Galway-based firm Cellulac.
Cellulac, which has developed products to make biodegradable plastic used in the cosmetics, nutritional food and healthcare sectors, is owned by investors including Gerard Brandon, once the chief executive of Irish wound-care firm Alltracel.
Integumen's non-executive chairman is Tony Richardson, also once a CEO of Alltracel.
Upon completion of the deal, which will constitute a reverse takeover, Mr Brandon will become chief executive of Integumen, whose name will be changed to Cellulac.
Mr Richardson is also chief executive of drug development firm Venn Life Sciences, which owns about one-quarter of Integumen.
Integumen, which floated on the Alternative Investment Market in London last year, said the proposed acquisition of Cellulac will enable it to enter the "highly attractive bio-materials and nutritional food sector, complementing its existing personal care business".
The Integumen board said that it has previously recognised the need to expand its revenue generating activities through product acquisitions. It said that it is also in the process of undertaking a "small debt or equity raise", in association with Cellulac, to pay ongoing transaction costs and to increase its financial resources.
The company has also approved a cost reduction and cost deferral programme with the aim of saving about £40,000 a month.
The £7.5m Integumen plans to raise is significantly more than the £1.8m it raised last year in its flotation, which at the time gave the fledgling company an £8.2m market capitalisation.
Integumen said the enlarged group will focus on biodegradable plastic ingredients, cosmetics and human grade food supplements.