Syntopix Group Acquisition Update

06 May 2011
Syntopix Group Acquisition Update

Syntopix Group plc acquisition and placing to raise £2 million

Syntopix Group plc (AIM:SYN), the speciality pharmaceutical research and development company focused on topical antimicrobial innovations for products in the medicine and consumer healthcare markets, is pleased to announce the following:

  • The proposed acquisition of the entire issued share capital of Leeds Skin Centre for Applied Research Limited ("Leeds Skin") (the "Acquisition") for a total consideration of £900,000 (£258,750 payable in cash on completion and £641,250 to be satisfied by the issue to the Vendors of 16,031,250 new Ordinary Shares);
  • A placing to raise £2 million, before costs, by means of the issue of 50,000,000 new Ordinary Shares at 4 pence per share (the "Placing") to fund the Acquisition and provide additional working capital; and
  • The proposed subdivision of each Existing Ordinary Share of 10p into 10 new Ordinary Shares of 1p each (the "Subdivision")

Leeds Skin is a private company located in Wetherby, Yorkshire, that runs an independent commercial testing facility specialising in the following:

  • Human Skin Microbiology;
  • Living Skin Equivalent tissue culture systems; and
  • Human Volunteer and Clinical Dermatology Research

Leeds Skin also provides laboratory service facilities for general microbiology applications and high quality contract research services and consultancy to the pharmaceutical, personal products and healthcare industries. Leeds Skin's client base includes Boots, L'Oreal, Stiefel (a GlaxoSmithKline company) and PZ Cussons and it reported unaudited turnover of £514,000 and an operating profit of £149,000 for the 9 months to 31 December 2010. The Acquisition is expected to be earnings enhancing.

Dr Stephen Jones, CEO of Syntopix commented: "The acquisition of Leeds Skin is a pivotal transaction for Syntopix. The significant cell biology experience of Leeds Skin will complement our own microbiological expertise, aiding development of Syntopix products. A key attraction was Leeds Skin's world leading LabSkin technology, a unique human equivalent skin which we can use to model various properties associated with human skin (anti-inflammatory, anti-ageing etc.). Together, we will have the capacity to run both clinical and laboratory studies to make rational choices of active compounds and confirm product claims. I am confident this will put the Company in an extremely strong position to identify and develop products in-house to treat a variety of skin problems.

Leeds Skin is a profitable company with an impressive client base and I am very excited about working with the team in this new phase of Syntopix's evolution."

The Directors consider the Acquisition, Placing and Subdivision to be in the best interests of the Company and its Shareholders as a whole. Since the Acquisition, Placing and Subdivision are conditional on the Company obtaining Shareholders' approval the Directors have therefore convened a General Meeting for 11.00 a.m. on 23 May 2011 in order to allow Shareholders to consider, and, if thought fit, approve the Resolutions.