Hamilton Thorne (TSX-V:HTL) has acquired all of the operating assets of Massachusetts-based Embryotech Laboratories for $7.25-million.
Hamilton Thorne estimates this transaction will be accretive to earnings in 2016 and is expected to add over $5-million of revenue and more than $1.5-million to EBITDA in 2017.
“Embryotech is the acknowledged U.S. leader in providing quality control services and testing assays to the assisted reproductive technologies community,” David Wolf, president and CEO, of Hamilton Thorne, said in a statement.
“Not only will this acquisition increase our scale, we anticipate that it will diversify our revenue base from a predominantly one-time sale of instruments model to a projected 40% recurring revenues from the sales of services and consumables,” he added.
Eric Dorman, who will continue as president of Embryotech, said that combining Embryotech with Hamilton Thorne’s portfolio of products and services provides Embryotech with increased financial strength, marketing expertise, and access to the international markets served by Hamilton Thorne.
“This relationship will bring greater resources to support our current operations and growth plans as well as provide greater opportunities to our employees,” he added.
Under the accord, Hamilton Thorne paid $6.075-million in cash and issued 7,759,154 common shares of Hamilton Thorne. Bloom Burton & Co. acted as financial advisor to Hamilton Thorne.
The acquisition was financed with cash and a new secured credit facility from Middlesex Savings Bank. The new credit facility includes a term loan of $5.5-million plus a line of credit of up to $2.5-million, of which $1.5-million was used at closing. The facility replaces Hamilton Thorne’s existing $3.5-million bank line of credit, for net new borrowings of approximately $3.5-million.