Revolymer divests nicotine gum business to Denmark's Alkalon for £900,000

19th Sep 2016 14:45

(ShareCast News) - AIM listed chemical company Revolymer agreed on Friday, to divest its nicotine gum business to Danish pharmaceutical Alkalon for £900,000 (kr8.2m).Revolymer will hold 15% equity in the combined new business, which may increase to 20% if the nicotine gum business meets certain milestones in the first nine months, such as winning new contracts in Canada, and expects to hold the investment for the medium to long term.The divestment is subject to conditions including the transfer of customer contracts and the Canadian product licence to Alkalon.Alkalon agreed to EU regulatory approval for its products and an established European customer base, which the company said, complements Revolymer's Canadian customer base.The combination offers the potential to grow the business in existing and new territories, while benefiting from savings in manufacturing and marketing.Revolymer will also be able to appoint a director to the board of the combined business, which will continue under the Alkalon name.Chief executive Kevin Matthews said the transaction marks further progress in the execution of the company's strategy to become a leader in functional polymers that manages the interface between different surfaces and phases to improve the safety, performance or sustainability of its customers' products.Matthews added: "Such functional benefits include the delivery and controlled release of actives, surface modification, and water quality improvement, and the target markets are homecare and Industrial, and personal care and consumer healthcare. We therefore believe that the transaction will have a positive commercial impact on Revolymer's business."Shares in Revolymer were down 5.26% to 36p at 0902 BST.