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Provalis sells pharmaceutical division to Kogen for £10.5 million
By Lisa Kerner
Erie, Pa., Feb. 1 - Provalis plc has agreed to sell certain assets of its pharmaceutical division, Provalis Healthcare Ltd., to Kogen Ltd., a pharmaceutical company affiliated with Galen Ltd. in Northern Ireland, for about £10.5 million, according to a company news release.
The assets include certain contracts of Provalis Healthcare, company goodwill, the intellectual property rights related to Provalis Healthcare's products and the stocks of Provalis Healthcare.
Kogen will pay a total consideration of £9.5 million, plus approximately £1.0 million for the stock of the products, payable in cash on completion. Transaction costs will be about £0.5 million.
According to the release, Provalis will use the net cash proceeds of about £10.0 million to repay the borrowings of about £5.2 million
An additional £3.8 million will allow Provalis to continue the resolution of the technical issues associated with in2it, a diabetes management test.
The Provalis group will retain the infrastructure, employees and certain other working capital balances of Provalis Healthcare. The closure costs associated with these employees and infrastructure are expected to be about £1.0 million
The sale is conditional upon shareholder approval.
"The disposal of Provalis Healthcare allows us to concentrate all our energies on the Medical Diagnostics division," Peter Woodford, interim chief executive officer of Provalis, said in the release. "This disposal provides us with a financial platform from which the group can address the technical issues associated with in2it and allow time for us to pursue all options for optimizing the value of the Medical Diagnostics division for shareholders."
Provalis is a medical diagnostics and pharmaceuticals group based in Deeside, Flintshire, U.K.
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