18th October 2022
Specialist corporate lawyers at Walker Morris have advised Avacta Group plc on its proposed fundraising and acquisition of Papyrus, a leading independent distributor in the UK in-vitro diagnostics (IVD) market, for up to £37 million (on a cash/debt free basis).
Avacta, a longstanding client of Walker Morris’, is an AIM quoted clinical stage oncology drug company and developer of powerful diagnostics based on it’s Affimer® and pre|CISION™ platforms. The acquisition will provide Avacta with an established route to market in the UK and several European IVD markets for existing and future products that it distributes, develops or acquires.
The acquisition is the first step in Avacta’s M&A led growth strategy for its diagnostics division and the establishment of a pipeline of potential acquisitions in the European diagnostics sector.
The fundraising that Avacta has also announced is to be carried out through (i) a non-pre-emptive placing of new ordinary shares to raise gross proceeds of approximately £5 million, (ii) a subscription for new ordinary shares by Avacta’s chair person, (iii) an open offer of new ordinary shares to be made to qualifying shareholders to raise gross proceeds of up to approximately £2 million and (iv) a convertible bond of £55 million in aggregate principal amount with an issue price of 95 per cent. of the principal amount (resulting in gross cash proceeds of £52.25m).
Richard Naish, William Procter and Anna Musk from Walker Morris’ corporate department led the team with support from specialist lawyers across the firm including Nicola Parkinson (tax), Elle Sugden (real estate), Liz Graham and Ruth Bamforth (pensions), Claire Burrows, Grace Stirrat and Michael Cordeaux (regulatory), Laura Oxley and Lauren Owens (employment), Shelley Quinn and Micha Naglis (commercial), Rebekah Dailey (finance), Sarah Ward (competition) and Rebecca Riding (commercial disputes).
Dr Alastair Smith, Chief Executive Officer of Avacta, commented:
“This acquisition will add an established distribution channel to Avacta with three decades of customer relationships and deep market knowledge to drive future product development, strategy and growth. It is the landmark first step in our ambitious M&A-led growth strategy for Avacta’s diagnostics division that has been a year in the making.
“Our vision is to build an integrated, differentiated, global reach IVD business serving professionals and consumers, that uses the benefits of its Affimer® platform to differentiate immunodiagnostic products in a competitive market. This is a transformational moment for Avacta Diagnostics, adding a well-established route to market for existing and future in-house and acquired products in the UK and across several key European markets.
“Avacta’s Therapeutics division continues to make good progress as expected in the clinical development of AVA6000, its first therapeutic product based on its proprietary pre|CISION™ technology as it progresses with the fourth cohort of patients in the phase 1 dose escalation study ALS-6000-101.”