A new potential deal
A new potential dealM&A /CORP. ACTION
FACT
DMS announced it has entered into exclusive talks with Hybrigenics, a bio-pharmaceutical company listed on the Euronext Growth market of Euronext Paris.
ANALYSIS
In short, the negotiations have only just begun. DMS would contribute its DMS Biotech division and get an 82% stake in the new entity. This said, the relative valuations need to be worked out. The due diligence process is only starting and the shareholders of both companies will then have to approve this transaction. After the (failed) similar operation with Intrasense last year (see our comments throughout FY18), the deal is not so surprising, DMS being eager to expand its biotech business. However, we are a bit surprised by the profile of Hybrigenics, a small player in the oncology field as far as we understand. Also, we note that Hybrigenics’ “strategy†before this news was simply to wind-up the business, after another acquisition attempt was withdrawn (from Moonstone investment). In fact, Hybrigenics Pharma has stopped the development of inecalcitol, a vitamin D receptor agonist, and does not generate any turnover. It seems as if DMS is acquiring a research team (and some assets?) but the operation looks very unclear at this stage, as are the benefits it could derive from this move (apart from listing quickly its biotech business). In all likelihood, no additional details will be given before the operation gets closer to materialising, thus our neutral opinion on it. We also remind again that the previous planned acquisition (Intrasense) took a long time to ultimately fail, so we remain cautious on the likelihood of a deal (DMS also insists that such a deal can only go through, among others, if AMF exempts them from making a full take-over offer).
IMPACT
No change on this news until the operation is confirmed and more details are made public on DMS’s strategy with respect to this acquisition.
DIAGNOSTIC MEDICAL SYSTEMS SA, (formerly known as DMS), is a France-based company, which together with its subsidiaries, designs, produces and markets medical imagery devices dedicated to conventional and digital radiology as well as bone densitometry. The Company manufactures a range of products for bone densitometry examination, including the ultrasound imaging system UBIS 5000, Challenger Envision, Stratos dR and Stratos. In the radiology sector, its products include Baccara dRF 43, EOL, Platinum and Da Vinci solutions, among others. In addition, it offers such products as scanners, transcranial Doppler, and Giotto Image mammography system. The Company operates several direct subsidiaries, AXS Medical, Apelem SAS, which manufactures radiology equipment, Medilink SARL, which produces Doppler and bone densitometry devices, Apelem SA, based in Spain, Alpha MOS based in France and one indirect subsidiary, SA Apelem and one indirect affiliated company, Spectrap.
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