EKF Diagnostics agrees non-binding sale of assets

18th Aug 2015 12:24

(ShareCast News) - EKF Diagnostics Holdings has agreed a non-binding deal to sell its point-of-care business for $110m (£70m) and assured investors that it expects to hit its full year target despite declining first-half profits.Under pressure from shareholders eager to realise some of the value already created in the business, the AIM-listed blood analysis technology group's non-executive directors launched a strategic review into its operations.The conclusion of this review on Tuesday saw executive chairman David Evans reveal the non-binding preliminary proposal of $110m for the POC business, on a cash free debt free basis, and excluding the associated clinical chemistry and molecular diagnostics businesses.To achieve the significant growth growth management foresees in its remaining businesses, the sale of the POC assets with allow EKF to invest significantly in its new products and platforms.He also proposed to step back to a deputy chairman role if the deal does not complete, with long-time shareholder and POC expert Ron Zwanziger invited onto the board as chairman.In a second announcement, the company said trading for the six months ended 30 June 2015 had seen revenues of £16.8m, around the same level as last year, despite not having materially benefited from any tender wins in the current period.Unaudited adjusted operating profits are expected to be around £0.7m, down two thirds from the £2.2m previously due to investment in the molecular division.Evans said: "I welcome the conclusions of my non-executive colleagues and, as a board, we are well aware that we are custodians of shareholder value and as such will remain focused on realising this value if practically possible.""If this cannot be achieved in the short-term I am confident that Ron Zwanziger, a shareholder and an individual with a strong history of growing point-of-care businesses, will open up a number of opportunities for the company as chairman, and that the Molecular Diagnostics division's move to become a distinct and separate business will allow us to deliver greater benefits for shareholders."Shares in EKF were up 1.2% to 22p just before close on Tuesday.