Swedish Enzymatica has signed an agreement to acquire Icelandic company Zymetech via a non-cash issue.
This acquisition gives Enzymatica international exclusive rights to a patent-protected enzyme, a key ingredient in ColdZyme Mouth Spray, as well as control over production of the enzyme, access to international research and development expertise and Zymetech’s portfolio. The capital contributed by the subsequent cash issues will enable a stronger focus on commercial investments and international geographic expansion, according to the companty.
Enzymatica will acquire 99.5 percent of the shares of Zymetech ehf. The purchase price consists of approximately 20,9 million new shares in Enzymatica and approximately 4 million new warrants to subscribe for additional shares in Enzymatica. The new shares will be the same type as the Enzymatica shares already issued.
As a result, it is proposed that the acquisition be completed via a non-cash issue of shares in Enzymatica offered to Zymetech’s shareholders. As of January 27, the 20,9 million shares were equal to a price of SEK 3.35 per share and a value of approximately SEK 70 million, while the premium for the 4 million new warrants was valued at approximately SEK 3.2 million. Each warrant entitles the holder to subscribe for one new share in Enzymatica at a subscription price of SEK 5 during a period of between 18 and 24 months from completion of the transaction. Standard conversion provisions will be applicable to the warrants in the event of transactions such as share issues. As part of the deal Enzymatica also acquires the right to trademarks on selected markets for SEK 3.1 million in cash from one of the principal owners of Zymetech.
In addition, Enzymatica’s board of directors will, subsequent to the closing of the transaction, propose a cash issue of new shares in the first half of 2016 with preemptive rights for existing shareholders amounting to approximately SEK 60 million and an extended mandate for a future private placement of up to SEK 40 million. The preemptive right issue and the extended mandate provide a decision at a separate extraordinary general meeting. The main reason for the preemptive rights issue is to create financial sustainability for the company to enable it to pursue commercial opportunities more aggressively and thus foster a substantial long-term future increase in the sales of cold product ColdZyme. The reason for the extended mandate for a private placement is to take advantage of future opportunities to bring in strong long-term owners and provide additional financing for the company’s growth strategy.
“We are excited about the acquisition of Zymetech, which I see as a key strategic complement to Enzymatica’s business and crucial for making our planned geographic expansion a reality. The acquisition gives Enzymatica patent-protected exclusivity for ColdZyme throughout Europe and about ten additional countries, which enables us to retain our lead over competitors until at least 2020,” says Fredrik Lindberg, CEO of Enzymatica, who continues:
The combined companies had total assets of approximately SEK 57 million and equity of approximately SEK 43 million as of September 30 2015. Translated to Swedish currency, their combined sales for the period January-September 2015 were just over SEK 20 million. The head office of the combined company will be in Lund. Zymetech currently has about ten employees who will be integrated into Enzymatica. After the acquisition, Enzymatica will thus have approximately 25 employees. The company’s organization for R&D and production will remain in Reykjavik. Management estimates that no significant staff changes will be made as a result of the transaction and that the bolstered financial resources of the combined companies will enable them to aggressively pursue commercial investments and international expansion. The liquidity of the combined companies has been secured in the short term with a loan from ALMI in the amount of SEK 5 million, with an option for an additional SEK 2 million following a resolution at the meeting to conduct the planned share issues.