SOURCE: Alltracel Pharmaceuticals Plc

August 23, 2007 02:01 ET

Alltracel to acquire specialist oral care business Synpart AG

DUBLIN, IRELAND--(Marketwire - August 23, 2007) -


                Alltracel Pharmaceuticals plc

   Alltracel to acquire specialist oral care business Synpart AG

   - Proposed acquisition will strengthen Alltracel's leadership 
     position in European specialist Oral Care supply market and 
     secure comprehensive Asian supply bases via the addition of 
                 an Indian supply network -

     - Alltracel will integrate Synpart AG with Westone, its 
     specialist Oral Care subsidiary and its existing consumer 
                  Wound Care business -

Alltracel Pharmaceuticals Plc., ("Alltracel" or the "Company"), (AIM:AP.L), the Healthcare Innovation Group focused on the Oral Care, Wound Care, Cardiovascular Health and Dermal Health markets, announces today that it is at an advanced stage of negotiations to acquire the issued and to be issued share capital of Synpart AG ("Synpart") a German based specialist Oral Care and Sports Bandages company (the "Acquisition").

It is proposed that Synpart AG will be acquired by Alltracel for a maximum consideration of EUR6.3 million. Initial consideration of EUR5.3 million will be satisfied through a cash payment of EUR3.3 million and, following the Acquisition, the issuance to the vendors of 10% of the then issued ordinary shares in Westone, Alltracel's exisiting oral care subsidiary (the "Westone Shares"). The cash consideration, together with additional working capital, is to be satisfied by a conditional cash placing to raise EUR2.4 million before expenses (the "Placing") and by enlarging existing debt facilities from Bank of Scotland by EUR3.1 million. It is proposed that, conditional on completion of the Acquisition, the Company will issue 12,920,000 ordinary shares of EUR0.0125 ("Ordinary Shares ") each in the share capital of the Company, at a price of 12.5p per Ordinary Share pursuant to the Placing. A further cash payment of up to a maximum of EUR1 million will become payable to the vendors, subject to certain performance criteria, on the first anniversary of completion of the Acquisition. In addition, the vendors will enter into a put option agreement with Alltracel under which the vendors will be granted an option entitling them to require Alltracel to repurchase, at the issue price, the Westone Shares. This option is exercisable by the vendors in four equal instalments on the 6, 12, 18 and 24 month anniversary of completion of the Acqusition or in full on the second anniversary of completion of the Acquisition or the vendors can opt to retain the Westone Shares.

It is expected that binding sale and purchase documentation for the Acquisition will be entered into, and that the Acquisition will complete, by no later than Friday, August 31 2007. A further announcement will be made in due course.

Synpart (www.synpart.de) operates principally in Germany but also in Austria and Switzerland. With a primary focus on the private label market, over two thirds of Synpart AG's turnover is generated from oral care products with the balance from sports bandages.

Synpart AG has invested in technology and in particular in product design and has built a suite of patents and patent applications in the area of dental and oral care. Synpart also has a strong sourcing network in India. In the twelve months to 31 December 2006 Synpart recorded turnover of EUR13.2 million, EBITDA of EUR1.15 million, profit before tax of EUR468,000 and at 31 December had net assets of EUR503,000.

The Board of Alltracel believe that the proposed Acquisition of Synpart AG has compelling strategic logic and will bring the following benefits to the Enlarged Group:

>  Will secure leadership of the EU private label specialist Oral Care
   supply market

>  Will bring a highly complementary product range:

   -   Alltracel already operates in the Oral Care market 
       via its London based subsidiary Westone.  Westone and 
       Synpart AG have an existing business relationship as 
       Synpart AG is an agent for Westone's dental floss products 
       in Europe's German speaking territories.

   -   By transferring Alltracel's consumer wound care business 
       to the new division it is expected that there will be increased 
       opportunity to improve wound care sales to private label customers 
       and leverage the existing m.doc(TM) product range particularly 
       in the sports bandage market.

>  Will extend each company's range of products and provides alternative
   established product sourcing arrangements;

>  Will be highly synergistic, bringing critical mass which will 
   enable greater competitive advantages for the new division.  
   Geographically the combined business will also be well positioned to 
   leverage Synpart's Indian network and Westone's Chinese presence for 
   both sourcing as well as facilitating a trading presence in two of 
   the fastest growing oral care markets in the world.

>  Synpart AG has been profitable after tax since inception in 2004 and
   generated a turnover of approximately EUR13m in 2006.

>  The Acquisition is expected to be earnings enhancing immediately.

It is intended that, following completion, the combined businesses of Westone and Synpart AG will be merged with Alltracel's consumer wound care business. Going forward the new business will have the single identity of Synpart Limited ("Synpart") (www.synpartlimited.com) as the Consumer Products trading division of the Alltracel Group with headquarters in London and offices in Cologne, Germany and a manufacturing network in China and India.

Commenting on the proposed Acquisition, Alltracel CEO Tony Richardson said;

"The Acquisition of Synpart will mark a step change in our European presence in the specialist Oral Care market significantly strengthening our portfolio of products and securing another critical Asian supply network.

Synpart Limited will be the resultant new consumer products trading entity formed from the combination of Synpart AG with our existing specialist oral care division and our consumer wound care business of m.doc™. Synpart Limited will be the leading Sourcing & Development Partner for private label and proprietary brands in the European specialist oral care and wound care markets and will have a particular focus on technological innovation.

I am delighted that Synpart AG management team will remain on board with us and I look forward to welcoming all Synpart's employees to the Alltracel Group. We look forward to building on their success both in Europe and Asia, two of the fastest growing regions driving the global Oral Care market towards the US$30 billion value forecast by 2010*."

Helmut Schlieper, Founder and Chief Executive Officer of Synpart AG said;

"We are very pleased to be joining the Alltracel Group and believe that our business will benefit enormously from the proposed transaction. Through our synergistic partnerships with private label entities we have built up a strong reputation over the last few years in Europe and Asia particularly.

By combining with Alltracel's divisions and Westone especially, we will be able to benefit from increased scale and product offerings and an ability to bring greater technological innovation to both our private label and proprietary brand customers more quickly. "

* Source: Global Industry Analysts

ENDS

For Further Information Contact:
Alltracel
Karen Muldowney          +353 1 235 2162  press@alltracel.com


Davy Corporate Finance
Des Carville             +353 1 679 6363
Stephen Barry            +353 1 679 6363


Financial Dynamics
London: Deborah Scott    +44 207 831 3113

Notes to Editors:

Alltracel, (AIM: AP.L) (www.alltracel.com) the Healthcare Innovation Group is focused on taking proprietary technology from research right through to commercialisation in the global healthcare market.

Alltracel Pharmaceuticals Plc., ("Alltracel") was founded in 1996 and is a public company which listed on London's Alternative Investment Market in July 2001.

With corporate headquarters in Dublin, Ireland; Alltracel has a commercial office in London, England; R&D subsidiary in the Czech Republic and manufacturing facilities in Shenzhen, China. Alltracel also has a wide network of research, development and manufacturing partners in Europe, Asia and North America.

Alltracel operates via two main divisions Alltracel Healthcare Group and Alltracel Healthcare Technologies:

Alltracel Healthcare Group is focused on the commercialisation effort behind proven innovative technologies and services for the global healthcare market. Alltracel Healthcare Group has a range of stake holdings, joint ventures and wholly owned business units operating in a variety of healthcare categories including Wound Care, Oral Care, Dermal Health and Cardiovascular Health.

  -  Alltracel's specialist Oral Care subsidiary Westone 
     (www.westoneproducts.com) is headquartered in London, 
     England and is the leading contract supply and manufacturing 
     partner for the European private label inter-dental market. Westone 
     also partners with a number of leading oral care brands 
     internationally.

  -  Alltracel's specialist Nanotechnology subsidiary Nanopeutics 
     s.r.o. (www.nanopeutics.net) is headquartered in Liberec in the 
     Czech Republic and is dedicated to the commercialisation of 
     Nanospider(TM) technology for the global healthcare market.
Alltracel Healthcare Technologies specialises in innovation, research, development and the deployment of proprietary technology in the global healthcare market. Alltracel Healthcare Technologies has established a substantial intellectual property portfolio with patents in a number of healthcare applications areas such as Wound Care, Oral Care, Cardiovascular Health and Skin Care.

m.doc™ is a trademark of Alltracel Pharmaceuticals plc.

Nanospider™ and Nanopeutics™ are trademarks controlled by Nanopeutics s.r.o.


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