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MEMPHASYS LIMITED. — Capital/Financing Update 2008
Sep 30, 2008
65314_rns_2008-09-30_d05f8028-f5fb-4cec-a5d8-3915c56b6722.pdf
Capital/Financing Update
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FOR IMMEDIATE RELEASE
NuSep Announces $25m Binding HOA to Acquire NxGen Pharmaceuticals
SYDNEY, AUSTRALIA – 1 October, 2008 – The Board of NuSep (ASX: NSP) is pleased to advise the market that it has signed a binding Heads of Agreement to acquire NxGen Pharmaceuticals for $25m. NxGen reported a net profit of $2.1m on sales of $4.8m in the year to 30 June 2008. This acquisition will be subject to shareholder approval.
NxGen Pharmaceuticals is the largest Australian custom pharmaceutical company supplying approximately 80% of the Australian market. NxGen has seen significant growth over the last few years driven in part by the erectile dysfunctional nasal spray that it manufactures on an exclusive basis for its medical clinic client. NxGen has a number of novel products which include a slow release implant designed to overcome drug and alcohol addiction.
This acquisition will be paid for through the issue of approximately 294m NuSep shares at 8.5c. This 294m shares will represent 87.5% of NuSep’s expanded capital. This acquisition values NxGen at $25m or 10 times its 08/09 net profit forecast of $2.5m
| NxGen | 2007/08 | 2008/9 |
|---|---|---|
| Sales | $4.77m | $5.5m |
| Gross Profit | $3.8m | $4.4m |
| EBITDA | $3.5m | $4m |
| Net Profit | $2.1m | $2.5m |
As outlined in the table below, the average Healthcare sector PE is 28 time earnings and the average All Ordinaries PE is 13 times earnings. This would indicate that the NxGen transaction should translate to a 10 - 20c value for NuSep shareholders.
| Healthcare Sector average PE | S&P 200 average PE | |
|---|---|---|
| Price Earnings | 25 times | 13 times |
| NuSep Share Price | 19¢ per share | 10¢ per share |
“This merger completes NuSep’s evolution into a profitable healthcare Company and provides significant value to our shareholders”, said John Manusu Executive Chairman of NuSep. “This merger will allow us to accelerate our growth and fast track the launch of new products both locally and internationally”, said Daryll Knowles CEO of NxGen.
Shareholders will also be offered an opportunity to top up their shareholding post the approval of this acquisition.
The Company is undertaking due diligence and expects to report back to shareholders within the next month.
Contact Details Telephone +61 2 8977 9000 Facsimile +61 2 8977 9099
Email [email protected] Web www.nusep.com ABN 33 120 047 556
NuSep Ltd 22 Rodborough Rd Frenchs Forest NSW 2086
Postal Address P.O. Box 6126 Frenchs Forest NSW 2086
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About NuSep
NuSep (ASX: NSP) is a publicly listed life sciences company that sells products into the global bioseparations market. The company has offices in both Sydney, Australia and Atlanta, USA.
With a 30 year heritage in biological separations, NuSep has forged a world class reputation for its innovative yet simple biological separation techniques including the world’s first IVF sperm separation device. In short NuSep has redefined the BioSeparations market through innovation and simplification.
NuSep’s world renowned research team has developed an extensive portfolio of patented products. In all, NuSep currently manufactures, distributes and sells 55 products to customers in the USA, Europe, Asia and Australia.
NuSep Products:
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- Gels – NuSep offers two precast gel ranges: iGels, innovative gels including long life gels with a 2 year shelf life: and NuBlu, high quality gels at an everyday price.
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- Separation Instruments – NuSep has developed two unique biological separation instruments. The first instrument released in February 2008 can separate biological samples into 8 fractions for use in the proteomic market. The second instrument separates sperm for fertility treatments such as IVF and is presently undergoing clinical trials.
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- Biological Products – NuSep supplies research grade biological products manufactured using its unique separation technologies. These products include human IgG and Albumin.
For more information about NuSep please visit the company’s website www.NuSep.com
Contact: Prakash Patel Chief Financial Officer & Company Secretary +61 2 8977 9000 [email protected]
About NxGen
NxGen Pharmaceuticals is the largest Australian custom pharmaceutical company supplying 80% of the Australian market. NxGen’s products includes the erectile dysfunction nasal spray, a natural hormone replacement therapy for women and a slow release implant designed to overcome drug and alcohol abuse.
For more information about NxGen please visit the company’s website www.NxGen.com.au
Contact: Dr Alan Amodeo +61 2 9232 0862