LONDON (ShareCast) - (ShareCast News) - Medical technology designer and manufacturer Surgical Innovations Group is planning to acquire specialist medical products distributor Elemental Healthcare, it announced on Thursday, in a deal worth £7.5m in cash and £1.875m in consideration shares.
The AIM-traded company said Elemental has been the exclusive distributor of SI-branded products in the UK since 2007.

It said it is a profitable and cash-generative business, and the acquisition would provide SI with a direct route to the UK market in a way that would be earnings-enhancing.

On completion of the acquisition, the vendors Adam Power and David Marsh would become significant shareholders in the enlarged company, and would join the main board of SI.

"The coming together of Surgical Innovations and Elemental is a natural progression for such a long-standing and interdependent partnership," said SI executive chairman Nigel Rogers.

"Not only does this acquisition add further profitability and cash generation to the group, but also provides SI with a direct route to the UK market through an experienced UK direct sales force

"In addition, we look forward to utilising Adam and David's commercial experience to prioritise new product innovation, and drive our marketing and business development in the UK and export markets."

Surgical Innovations also announced its intention to conduct a vendor placing and subscriptions of up to 183,333,333 new ordinary shares at a price of 3p per share, to raise up to £5.5m before expenses, to part-fund the acquisition.

"This deal brings together two highly complementary and long established businesses - both focused on providing the highest levels of personal service to the medical device sector," said Elemental managing director Adam Power.

"With our respective strengths and heritage, the two businesses have already enjoyed a long history of working together."

Power said the enlarged company would look to build on its current expertise and reputation, sharing each other's knowledge and experience.

"This creates a powerful and innovative new company with the aim of growing substantially, both through increasing organic growth and potentially through further acquisitions."

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