Provexis plc has entered into a conditional agreement to purchase the entire issued share capital of SiS (Science in Sport) Limited, which manufactures and sells sports nutrition products, for a total consideration of £8 million.
 
Provexis has raised £2.5 million via a placing of 166,666,662 new ordinary shares of 0.1 pence each in the company conditional on completion of the acquisition and receipt of all the placing proceeds by Evolution Securities Limited. Additionally, Provexis intends to undertake an Open Offer to shareholders as soon as is reasonably practicable after the completion of the acquisition.
 
The Acquisition of SiS is for total consideration of £8 million, of which £7 million will be satisfied in cash and a further £1 million will be satisfied in new Ordinary Shares (fully paid).

SiS produces sports nutrition products for consumers and professional and elite athletes, including Olympic athletes, professional cyclists and triathletes.

For the financial year ended December 31, 2010, SiS had unaudited turnover of £4.6 million. The directors believe the acquisition price is attractive in the context of recent deals in the sports nutrition market. The global sports drink market had an estimated $24.5 billion of sales in 2010. In the same period in the U.K., sales of sports drinks were estimated to be £220 million, sports foods £30 million and sports supplements £70 million. All three sectors in the U.K. have shown growth since 2006.

The acquisition provides immediate revenue and cash flow to the company and its subsidiaries, and diversifies the group’s business model from its existing longer-term technology development and licensing model. The spectrum of the company’s operations post-acquisition will extend from the existing discovery, development and licensing of intellectual property to include the marketing and direct sales of functional foods.

The directors of the company believe that Provexis can use its management and technical capabilities to support growth in the SiS business in the areas of product development, scientific and regulatory expertise and expertise in the sports nutrition sector.

The placing will raise £2.5 million (before expenses) which the company will use to partially fund the cash consideration for the acquisition.

Stephen Moon, CEO of Provexis plc, commented: “We are delighted to announce that the company has entered into a conditional agreement to acquire SiS (Science in Sport) Limited which is expected to complete on June 24, 2011. Science in Sport is a highly regarded and growing company in the substantial sector of sports nutrition. I believe there are strong synergies between the two businesses, with the existing scientific, regulatory and product development capability of Provexis available to further enhance the reputation of Science in Sport with elite and professional athletes. The revenue generating, profitable nature of the new business will help us to achieve our strategic goals, by adding a near term revenue stream to our longer-term pipeline development bias. Management of the enlarged business will be highly focused on growing revenues from our Fruitflow heart-health Alliance with DSM Nutritional Products, the new Science in Sport business and continuing to build longer-term shareholder value from our pipeline.”
 
Phil Walker, managing director of SiS commented: “This represents a great opportunity for the growth of the business. Provexis offers a solid platform for SiS to continue its development, in terms of products and share of the market. I firmly believe that Provexis’ scientific, product development and management experience will add further value to the SiS business. This is an exciting time for the sports nutrition market, particularly in the approach to the Olympics, with an increasing number of athletes and consumers demanding high quality products.”