Modern Water acquires Microtox
Modern Water (AIM:MWG), a provider of leading water technologies for the production of fresh water and monitoring of water quality, is pleased to announce that it has today entered into an agreement with Strategic Diagnostics Inc. ("SDIX") to purchase the assets of its water quality division (the "division"), including its Microtox® toxicity testing technology ("Microtox"), for US$4.5 million.
The acquisition is expected to complete during the fourth quarter of 2011 once transitional arrangements are in place.
The water quality division of SDIX, based in Newark, Delaware, sells products and services to determine toxicity and detect contaminants in water and soil. Its two main product groups are toxicity detection using bioluminescence, and industrial bio-detection of substances including pesticides, herbicides and PCBs. In the year to 31 December 2010, the division had revenues of $4.79m and gross profit of $2.67m. Profit before tax for that period (after certain SDIX central cost allocations) was $0.54m.
The Board of Directors of Modern Water believes that the technology, products and geographic focus of the division are complementary to the Group's existing water monitoring business. The acquisition will provide a strong platform for the Group to achieve its strategy of accelerating sales through a worldwide distribution network for its water quality testing and monitoring technologies.
As part of the acquisition, Modern Water is acquiring the division's intellectual property, its current inventory and commercial contracts, as well as its equipment and staff. No office leases or other infrastructure items are being transferred. The assets will be acquired by Modern Water's new wholly-owned subsidiaries in the US and in the UK.
The consideration for the acquisition will be paid in cash and funded out of the Group's existing cash reserves. There will be no change to the Group's shareholder base, voting control or Board of Directors.
Simon Humphrey, Chief Executive of Modern Water, said "We are delighted to announce the acquisition of the water quality division of SDIX, and in particular Microtox, the leading worldwide brand in water toxicity monitoring. There are clear synergies between our existing portfolio of water monitoring products, as both Cymtox and Microtox use the same platform bioluminescent technology for water toxicity monitoring. Our combined expertise in bioluminescence provides a strong base for future product development. Microtox sales will benefit from the distribution channels Cogent and Cymtox have established in China and Asia, whilst sales of our existing products will be enhanced by the strength of the sales team and distribution partners we are acquiring in the US and Canada."