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ImmunoPrecise’s Strategic Acquisition Increases Synergies, Scale and Efficiency

ImmunoPrecise is pleased to announce that it has acquired all of the issued and outstanding shares of ModiQuest Research BV.

As a result of the acquisition, ImmunoPrecise is now an innovative, integrated antibody solutions company focused on the next generation of technology behind therapeutic antibody discovery.

Financial benefits of the acquisition

The financial benefits expected from the acquisition include:

  • Accretive annualised revenues of between C$3.5m and C$4.5m for the fiscal year ending 2019
  • Anticipated accretive annualised earnings before interest, tax, depreciation and amortisation (EBITDA) of between C$750,000 and C$850,000 for the fiscal year ending 2019
  • European operations now account for approximately 66% of corporate revenues
  • ModiQuest operations experience high gross margins of approximately 73%

Strategic benefits of the acquisition

The strategic benefits expected from the acquisition include:

  • Creation of a single source provider of services across the full antibody discovery value chain such as an increased variety of therapeutically-focused methods of immunisation and antigen design, including several, highly effective methods of genetic immunisation with multiplexed screening, b-cell screening and sorting technologies, efficient antibody expression, stable cell line development, and lead selection, optimisation and characterisation.
  • Acquisition of next-generation antibody discovery technologies, building on ImmunoPrecise’s goal of revolutionising therapeutic antibody discovery
  • ModiVaccTM, a novel and proprietary technology based on immunisation with an augmented, lymphoid tumour cell line that is ideal for generating strong immune responses against low-immunogenic or difficult targets
  • ModiSelectTM, a proprietary technology for antigen-specific b-cell isolation from immunised animals and humans, resulting in large numbers of high affinity, pre-defined, therapeutic and diagnostic antibodies
  • ModiXpressTM, a proprietary and cost-efficient platform for rapid cloning, selection for high expression, purification of antibodies and stable cell line development
  • ModiFuseTM, a proprietary and highly-scalable electrofusion that is more than fifteen times more efficient than traditional PEG fusions
  • ModiPhageTM, human patient, human and llama (VHH and scFv) naïve, and custom phage libraries with supporting, customisable services
  • ModiTuneTM, antibody chimerisation with any Fc region of choice, robust and efficient humanisation services and affinity maturation
  • Overall, the increased probability of discovering therapeutically relevant antibodies, which translates into greater success at a clinical level

Terms of acquisition and financing

ImmunoPrecise acquired ModiQuest and its sister entity Immulease BV for an aggregate purchase price of €7,000,000 (C$11,200,000). Immulease is a holding company owning research equipment used in ModiQuest’s operations. €5,000,000 (C$8,000,000) of the purchase price was paid on closing, consisting of €2,500,000 (C$4,000,000) in cash and 6,600,399 common shares of ImmunoPrecise (valued at a price of €0.38 (C$0.57) per share).

The remaining €2,000,000 (C$3,200,000) of the purchase price will be paid in three annual instalments of consisting of equal parts cash and equity. The annual instalment payments will be adjusted downwards (but not upwards) on a prorated basis if ModiQuest’s EBITDA for the fiscal year preceding the date of payment is less than its average EBITDA over the previous two fiscal years.

In conjunction with closing the transaction, ImmunoPrecise completed its previously announced non-convertible debenture financing in the principal amount of C$4,002,000. The debentures are unsecured, bear interest at a rate of 10% per annum, payable semi-annually, and be due eighteen months from the date of issue.

Under the offering, a holder of a debenture received 37,500 detachable share purchase warrants for every $25,000 of debentures subscribed for by the holder. The warrants are exercisable at $0.70 per share for a period of four years from the date of issue.

The proceeds of the offering were used to satisfy the closing cash payment to acquire ModiQuest and Immulease. Under the offering, ImmunoPrecise paid $10,000 in cash, 533,980 in shares of ImmunoPrecise and 395,942 warrants.

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