XVIVO Perfusion to acquire the Dutch medtech com­pa­ny Organ Assist and finances the acqui­si­tion through a pri­vate place­ment of new shares

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XVIVO Perfusion AB (publ) (“XVIVO” or the “Company) has today signed an agree­ment to acquire 100 per­cent of the shares in the Dutch medtech com­pa­ny Organ Assist B.V. (“Organ Assist”) for a cash pur­chase price of up to EUR 24 mil­lion, with an upfront pay­ment of EUR 20 mil­lion and poten­tial earn-out pay­ments of up to EUR 4 mil­lion. Organ Assist focus­es pri­mar­i­ly on devel­op­ing machines and con­sum­ables for liv­er and kid­ney per­fu­sion. Through the acqui­si­tion XVIVO becomes the first organ preser­va­tion and eval­u­a­tion com­pa­ny in the world to be active­ly involved in all major organs, which accel­er­ates the Company’s strat­e­gy of becom­ing a glob­al all organ provider. The acqui­si­tion is to be financed by way of a new share issue of shares of approx­i­mate­ly SEK 500 mil­lion direct­ed to Swedish and inter­na­tion­al insti­tu­tion­al investors through an accel­er­at­ed book-build­ing pro­ce­dure, which is expect­ed to com­mence today.

Background and the trans­ac­tion
Organ Assist is a medtech com­pa­ny pri­mar­i­ly focus­ing on devel­op­ing per­fu­sion machines for liv­er and kid­ney. Organ Assist was found­ed in 2005 and its research and prod­ucts have since result­ed in a num­ber of patents and intel­lec­tu­al prop­er­ty rights, and its prod­ucts with­in the area of liv­er and kid­ney trans­plan­ta­tions are CE-marked.
 
The total pur­chase price for 100 per­cent of Organ Assist’s shares amounts to up to EUR 24 mil­lion, where­of EUR 20 mil­lion will be paid in cash on com­ple­tion of the trans­ac­tion, and two addi­tion­al cash mile­stone pay­ments, each up to EUR 2 mil­lion, become payable based on sales tar­get in 2021 and reg­u­la­to­ry approval in the US for Organ Assist’s kid­ney device, respec­tive­ly.
 
XVIVO secures that organs are kept in opti­mal con­di­tion dur­ing trans­porta­tion and perfusion/evaluation with focus on lungs and hearts. Organ Assist has, since the com­pa­ny was found­ed in 2005, focused pri­mar­i­ly on devel­op­ing per­fu­sion machines for liv­er and kid­ney. The com­pa­nies’ syn­er­gies enable greater mar­ket oppor­tu­ni­ties for XVIVO’s and Organ Assist’s prod­uct port­fo­lio through the inte­gra­tion of XVIVO’s unique and patent­ed STEEN Solution tech­nol­o­gy with the Organ Assist kid­ney and liv­er machines, and by lever­ag­ing XVIVO’s inter­na­tion­al mar­ket pres­ence.
 
The acqui­si­tion is in line with XVIVO’s com­mer­cial strat­e­gy to strength­en the Company’s prod­uct offer­ing and accel­er­ate the strat­e­gy of becom­ing a glob­al all organ provider. The com­ple­men­tary prod­uct port­fo­lio will cre­ate a unique posi­tion with pres­ence in all major organs (lung, heart, kid­ney and liv­er). The com­bined offer­ing expands XVIVO’s address­able mar­ket to approx­i­mate­ly 98 per­cent of the organ trans­plan­ta­tion mar­ket and aim to posi­tion the Company as the “first choice” for all mul­ti-organ clin­ics.
 
XVIVO has a strong pres­ence in the US and was the first com­pa­ny in the world to receive an U.S. Food and Drug Administration (FDA) approval (HDE approval) for a med­ical device for warm per­fu­sion of an organ. Organ Assist’s prod­ucts are CE marked and pro­tect­ed under patents and oth­er intel­lec­tu­al prop­er­ty rights. The plan is to com­mer­cial­ize the Organ Assist machines in the US by uti­liz­ing XVIVO’s strong mar­ket pres­ence and com­mer­cial­iza­tion- and reg­u­la­to­ry expe­ri­ence, once FDA approval has been grant­ed.
 
“This acqui­si­tion will enable the exe­cu­tion of an accel­er­at­ed growth plan, both in terms of sales as well as R&D activ­i­ties, while build­ing on a sol­id installed base and a lead­ing posi­tion in liv­er per­fu­sion. It is a token of appre­ci­a­tion of the inno­v­a­tive work done by our employ­ees in Groningen. We are look­ing for­ward to work­ing with the XVIVO team build­ing a world lead­ing medtech com­pa­ny, sup­port­ing our cus­tomers to save and improve patients’ lives” says Organ Assist CEO Wilfred den Hartog
 
“We are hap­py that Organ Assist becomes part of XVIVO Perfusion; it is the per­fect part­ner to bring the Organ Assist’s inno­v­a­tive sys­tems to the organ trans­plan­ta­tion com­mu­ni­ty” Willem van Lawick, Organ Assist’s Chairman added.
 
“XVIVO becomes the first organ preser­va­tion and eval­u­a­tion com­pa­ny in the world to be active­ly involved with all major organs after this strate­gi­cal­ly impor­tant acqui­si­tion” says XVIVO Perfusion CEO Dag Andersson.
 
Financials and syn­er­gies
Organ Assist had a turnover of EUR 3.5 mil­lion and an EBITDA of EUR 0.1 mil­lion in 2019 and a turnover of EUR 1.3 mil­lion and an EBITDA of EUR 0.1 mil­lion in January – June 2020. Organ Assist has its head office and R&D cen­ter in Groningen, The Netherlands, where its 18 employ­ees are based, and Groningen will remain as a com­pe­tence cen­ter for the devel­op­ment and com­mer­cial­iza­tion of machines and solu­tions for liv­er and kid­ney. Both prod­uct- and clin­i­cal devel­op­ment will be inten­si­fied after the acqui­si­tion.
 
XVIVO and Organ Assist have lim­it­ed over­lap­ping busi­ness­es with­in the field of tho­rax trans­plan­ta­tions – lungs and hearts – and XVIVO there­fore sees lim­it­ed cost syn­er­gies since the com­pa­nies as of today have few dou­ble costs and resources with­in this field. Within the field of abdom­i­nal trans­plan­ta­tions – kid­neys and liv­ers – the busi­ness­es com­ple­ment each oth­er.
 
Financing and con­di­tions
Completion of the acqui­si­tion is expect­ed to take place dur­ing October 2020 and is con­di­tion­al upon XVIVO rais­ing pro­ceeds to finance the pur­chase price through a pri­vate place­ment of shares on Nasdaq Stockholm. XVIVO has engaged Carnegie Investment Bank AB (“Carnegie”) to explore the con­di­tions to car­ry out a direct­ed share issue of up approx­i­mate­ly SEK 500 mil­lion based on the autho­riza­tion grant­ed by the annu­al gen­er­al meet­ing on 31 March 2020. The price of any new shares issued in the direct­ed share issue will be deter­mined through an accel­er­at­ed book­build­ing pro­ce­dure admin­is­tered by Carnegie. Further infor­ma­tion about the direct­ed share issue and the accel­er­at­ed book­build­ing pro­ce­dure, which is expect­ed to com­mence today, will be dis­closed through a sep­a­rate press release.

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