Avacta buys Belgium-based Coris Bioconcept for £7.4m

Life science company Avacta Group announced the acquisition of Coris Bioconcept for initial cash consideration of £7.4m on Thursday.

The AIM-traded firm said the acquisition, which remained subject to customary working capital adjustments, also included a potential earnout of up to £3m based on future business performance.

It said Coris, founded in 1996 and based in Gembloux, Belgium, specialises in the development, manufacturing, and marketing of rapid diagnostic test kits, with a particular focus on lateral flow tests used by healthcare professionals.

The company is ISO 13485 certified and distributes its products through a network across Europe, Asia, South America, Africa, and Oceania.

In 2021, Coris generated 80% of its revenue from Europe, 12% from America, and 8% from the Middle East, Africa, and Asia-Pacific regions.

Unaudited revenues for Coris in the financial year ended 31 December reached £4.6m, with the majority of sales unrelated to Covid-19.

The company achieved a gross margin of 50% during the 2022 fiscal period, with an EBITDA of £0.35m and a loss after tax of £0.02m.

As at 31 December last year, Coris' net assets were valued at £6m.

Coris currently employs 35 staff members across various departments, including production, sales, marketing, quality control, regulation, and administration.

In March, the firm completed the construction of a new 10,700 square foot facility in Gembloux, which houses production, office, and warehouse spaces.

Coris' product portfolio consists of diagnostic tests for respiratory, gastro-enteric, and blood-borne pathogens such as bacteria, viruses, and parasites.

The company also offers tests for detecting antibiotic resistance markers, with Coris also marketing a Covid-19 lateral flow test.

As a result, Avacta said it had decided to discontinue the development of its own ‘AffiDX’ SARS-CoV-2 antigen lateral flow test.

Under the terms of the acquisition, the existing management team at Coris would continue to lead the business, and would collaborate closely with Avacta's diagnostics division to drive growth and improve margins through enhanced distribution channels and an expanded product range.

Avacta said it would transfer its lateral flow product development activities to Coris and provide ongoing support through the development of ‘Affimer’ reagents for new or improved products.

“The acquisition of Coris provides the Group with a broad, professional-use rapid test product portfolio,” said chief executive officer Alastair Smith.

“Complementing the acquisition of Launch Diagnostics last year, the acquisition represents an important step in establishing a full-spectrum in-vitro diagnostics business covering centralised, pathology laboratory diagnostics, as well as decentralised, point-of-care testing solutions outside the hospital setting.

“Antibiotic resistance is a major global challenge and we strongly believe that the market for antimicrobial resistance (AMR) testing is one with good future growth prospects.”

Dr Smith said the company was “particularly pleased” to have added an AMR product portfolio to the group with the acquisition.

“With this acquisition, our diagnostics division has taken another important step towards realising its mission to support healthcare professionals and broaden access to high quality diagnostics.”

At 1433 BST, shares in Avacta Group were down 2.8% at 104.98p.

Reporting by Josh White for Sharecast.com.