ALS shares drop on news of Nuvisan takeover
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More news: Shares in ALS Limited were down 3.4% to $13.26 in early trading on the ASX after the laboratory testing giant said it would acquire full control of troubled European pharmaceutical research and development business Nuvisan for nil cost.
ALS acquired a 49% stake in Nuvisan in 2021 for €145 million ($240.5 million), and said it would write down the majority of the $258 million carrying value for Nuvisan currently held on its books.
ALS to acquire full control on Nuvisan Pharma at zero cost
The news: Laboratory testing giant ALS Limited has agreed to acquire full control of troubled European pharmaceutical research and development business Nuvisan, in which it currently holds a 49% stake.
The numbers: ALS said it would acquire the remaining 51% at zero cost, with the transaction effective from 31 March. Following this, it will implement a transformation program at Nuvisan to increase revenue and improve profitability.
It estimates restructuring costs at €20 million ($33.2 million) over two years, with the program to result in annual cost savings of €20 million.
The context: ALS acquired the 49% stake in Nuvisan in 2021 for €145 million, but held an option to acquire the remaining stake in 2024.
The company said it would write down the majority of the $258 million carrying value for Nuvisan currently held on its books, as part of the fair value adjustment.
Following a strategic review of Nuvisan, it has determined that taking full control provided the best opportunity to deliver earnings growth and maximise shareholder value at the European-based contract research organisation, ALS said.
The source: ASX announcement
