The acquisition is expected to double Biotrace's revenues from business in the pharmaceutical arena by significantly expanding its product range, said the company in a statement. It also helps the company maintain its strategy of making 80 per cent of its turnover from consumable products, which improves stability by encouraging recurring business.
At present, pharmaceuticals represent just 9 per cent of Biotrace's industrial sales of testing products, but the addition of MicroSafe will give the UK firm a broader product range and allow it to compete more strongly with rivals servicing this sector, said the firm.
MicroSafe is headquartered in Rome and comprises four business units. Ascotec makes a range of environmental monitoring systems for drugmakers, while the MicroSafe unit itself is a sales organisation, detailing Ascotec brand products and and other lines, including pre-prepared cell culture media, and operating in Italy, Hungary, Slovenia and Croatia. Its main clients are in the drug industry.
One of the main attractions of the acquisition is the ability to expand sales of Ascotec products outside these current markets, and to broaden the geographic coverage of its own Biotrace lines, said the firm.
The third business is Themis, which serves the defence industry, and the final piece of the jigsaw is a 39 per cent stake in Target Diagnostica, whose customers span the food, beverage and pharma industries.
Giovanni Scialo, the founder of MicroSafe, will serve as managing director of the Biotrace-MicroSafe, a holding company for the newly acquired businesses, and will lead the pharmaceutical business development programme.
MicroSafe is just the latest in a series of acquisitions by Biotrace. In June 2004 the company acquired Tecra, which makes safety products for the food manufacturing industry, and it recently bought out its share in French joint venture Biotrace SA. Meanwhile, last year it also snapped up International BioProducts, another food microbiology specialist.
Profits on the rise
Biotrace has also reported a 9 per cent hike in revenues in the first half of 2005 to £13.6 million, while operating profit advanced 58 per cent to £1.4 million. MicroSafe had sales of €7.7 million in 2004 and net profits of €800,000, and Biotrace said the deal would enhance its earnings in the first year of operations.
Meanwhile, the UK firm said its cash-generating business model would allow it to make additional investments in the future, both internally and through acquisitions.
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