Press Releases

Celsis To Acquire In Vitro Technologies, Inc.

LONDON -- June 14, 2006 -- Celsis International PLC (the "Company" or the "Group"), the rapid diagnostics and analytical services company, today announces the proposed acquisition of In Vitro Technologies, Inc. (“IVT”), a US provider of in vitro testing products and services to the pharmaceutical and biotechnology industries, for an initial consideration of $30 million in cash, plus an earn-out consideration capped at $5 million.

About IVT

  • Supplies products and services to improve the drug discovery and development process
  • Focus on the growing in-vitro ADME-Tox market (“Absorption, Distribution, Metabolisation and Excretion”)
    • improves the success rate in drug testing
    • estimated 50% failure rate of drug compounds during early stage development due to ADME or toxicity
  • Broad range of proprietary ADME-Tox tools, including cryopreserved cells and enzymes
  • Approximately 80% of 2005 sales generated from products, with balance from services
  • Clients include large blue chip pharmaceutical and biotechnology companies

Reasons for the Acquisition

  • Attractive growth prospects of the in-vitro ADME-Tox market
  • Complementary fit with existing Celsis businesses which focus on saving time and money for pharma and biotech customers
  • Addition of new products with attractive margins
  • Cross-selling opportunities to combined customer base
  • Introduction of new skills and expertise to the Group for future products and services development

IVT Financials

  • 2005 turnover of $11.6m (2004: $9.6m)
  • Gross margin of 69% in 2005
  • 2005 operating profit of $1.2m (2004: $0.7m)
  • Initial consideration of $30m in cash, to be financed by existing cash resources and $13.5m debt financing
  • Earn-out based on 2006 turnover in excess of $13.1m (implied 13% growth against 2005 turnover) - capped at $5 million
  • Strong current trading: IVT turnover up 19% for 4 month period to 30 April 2006 against 2005 comparable period

Excluding goodwill amortisation and exceptional costs, the acquisition is expected to be earnings enhancing in the first full year of ownership. This statement should not be interpreted to mean that the Group’s future earnings per share will necessarily be greater than its historical earnings per share.

Commenting on today’s announcement, Jay LeCoque, Chief Executive Officer said:

“With the acquisition announced today of In Vitro Technologies Inc., Celsis will have significantly transformed its business through improved product and services portfolio and creating clear cross-selling opportunities which we expect to deliver material growth in the coming years. Celsis is well positioned to continue its track record of strong growth both organically and by acquisition.”

Paul Silber, IVT’s founder, added:

“We could not have hoped for a better strategic partner than Celsis. The synergy created by joining forces will create a strong team with great potential for future growth. This new combination will provide our respective customers with great value through a significantly expanded product and service offering. I very much look forward to working with the team at Celsis.”

The acquisition, because of its size, is a Class 1 transaction for Celsis under the Listing Rules and is therefore conditional, inter alia, on the approval of Celsis shareholders. A resolution to approve the acquisition will be proposed at an Extraordinary General Meeting of Celsis’ shareholders to be held on 11th July 2006.

Meeting for Analysts

A meeting for analysts will be held at the offices of Financial Dynamics, Holborn Gate, 26 Southampton Buildings, London WC2A 1PB today at 9.30 BST. Please call Gemma Cross Brown on 020 7269 7125 for further details.