Disposal will allow Bioquell to focus on its core bio-decontamination business
Bioquell, a provider of specialist microbiological control technologies to the healthcare, life science and defence markets, is to sell its specialist testing services subsidiary, TRaC, to Element Materials Technology Group Holdings for Â£44.5m in cash.
For the year ended 31 December 2013, TraC, which employs 193 people and is headquartered in Malvern, Worcestershire, UK, had revenue of Â£16.8m and an operating profit of Â£3.4m. Unaudited revenue to 31 December 2014 was Â£18m.
TRaCâ€™s two core activities comprise electromagnetic compatibility (EMC) testing and environmental testing, which largely relates to dynamic vibration, mainly for the aerospace and defence sectors, although Bioquell said it has clients in a number of other sectors including telecoms, healthcare and other industrials.
Andover, Hampshire-based Bioquell said the sale would allow TRaC to 'pursue further growth opportunities within a larger testing, inspection and certification business'.
The sale is expected to generate an exceptional profit before expenses of approximately Â£35.4m for Bioquell.
Over the last ten years we have grown TRaC into a highly successful specialist testing business
Following the sale, Bioquell will comprise a biological contamination control business. This Bio division had revenue of Â£27.9m for the year ended 31 December 2013 and unaudited revenue of Â£27.3m for 2014. The company said the division was 'well placed to enjoy good organic growth with an innovative and modern range of products and services'.
Nigel Keen, Chairman of Bioquell, said: 'The Board of Bioquell decided earlier this year to seek offers for TRaC in order to simplify the Group and realise value for shareholders.
'Over the last ten years we have grown TRaC into a highly successful specialist testing business and I am delighted that we are now able to demonstrate to shareholders the significant value that we have created.'
Keen added: 'It has become increasingly clear that the time is right to sell TRaC. The improved prospects of our main Bio division â€“ due to an improved product mix and targeted cost savings â€“ and the inherent value of TRaC have not been properly reflected in the Bioquell share price over recent months. The disposal will enable us to focus on our core bio-decontamination business and take advantage of the growing opportunities in our core healthcare, life sciences and defence markets.'
The deal is expected to be completed by 30 April.