(MENAFN - ProactiveInvestors - Australia) Alliance Pharma (AIM: APH) has completed the acquisition of Cambridge Laboratories it announced earlier this month. The company expects the deal, which adds 18 new prescription products to Alliance's portfolio, to be significantly earnings enhancing in the current financial year. Cambridge's commercial manager Peter Butterfield has also been appointed to the Alliance Pharma board.
The acquisition is worth between 14.3m and 16.4m, plus an additional 1.4m for Cambridge's product inventory. An initial 10.2m was paid upon completion which will be followed by a further three scheduled payments, taking the base consideration to 14.3m.
The deal has been part-funded through a 7.5m equity placing. Alliance issued approximately 28.8m new shares to certain existing and new UK investors by Numis Securities Limited, at a placing price of 26p per share. The remaining balance was satisfied through an additional 4m term loan provided by Lloyds Banking Group.
Additionally a deferred element, between 1.6m and 2.1m is dependent upon certain sales targets for ImmuCyst and is subject to its licence being extended to 31st March 2012.
Alliance said the Butterfield appointment will assist the integration of the Cambridge portfolio. "We are delighted to welcome Peter to Alliance. He brings with him extensive knowledge of the products acquired from Cambridge Laboratories which will be invaluable as we integrate the two businesses", Alliance Chief Executive John Dawson stated. Butterfield previously held sales and marketing positions at SmithKline Beecham, now GlaxoSmithKline (LSE: GSK) before joining Cambridge in 2004. Butterfield is also a board member of the Association of the British Pharmaceutical Industry (ABPI) and is currently chairman of the ABPI Small Companies Forum.
The Cambridge Laboratories portfolio has 18 prescription products across a broad range of therapeutic areas include oncology, toxicology and others. In commercial terms, the company's key products are primarily in the oncology area. The ImmuCyst product is an immunotherapy for bladder cancer, Procarbazine forms part of a chemotherapy treatment for Hodgkin's Lymphoma and its Gelclair product is an oral gel used in the management of oral mucositis, which is a side-effect caused by chemotherapy and radiotherapy.
The product portfolio also includes a toxicology product which is contracted for a UK government stockpile, and is replaced on a 2-3 year cycle. Cambridge's existing 5.6m contract runs from October 2009 to January 2011.