- Veterinary franchise Apiam Animal Health spent $16 million today to buy highly coveted animal vaccines
- The vaccines, known as custom autogenous vaccines, are made specifically for maintaining healthier large-scale livestock in farming operations and distributing to vet practitioners
- Getting its hands on the vaccines, Apiam will purchase Victoria based genetics company ACE Laboratory
- ACE Laboratory is backed by the Victorian Government and generated $5.6 million in revenue during the 2019 financial year, contrasting with Apiam which underwent a 1.6 per cent yearly decrease on gross profits most recently
Veterinary franchise Apiam Animal Health has upped its game after spending $16 million to secure an array of custom animal vaccines.
The ASX listed company carried out the portfolio expansion through the purchase of animal focused genetics company, ACE Laboratory.
“The acquisition of ACE Laboratory Services is highly compelling for Apiam, delivering an immediate and established position into a highly specialised and attractive business segment,” Apiam Managing Director Dr Chris Richards said.
According to Apiam itself, ACE is specialised in what’s called ‘autogenous’ vaccines for animals, also known as bespoke or custom vaccination solutions.
Autogenous vaccines are created from a dead or sick animal, providing a vaccine for the greater population – much like getting your yearly flu shot.
This practice is integral to keeping large farming operations running without issues of constant sick animal cases. ACE Laboratory’s services are already provided to farmers and veterinarians around Australia.
According to Apiam, autogenous vaccines are increasingly being used in the farming industry, supporting growth in sustainable livestock.
Through the deal, Apiam will acquire 100 per cent of ACE Laboratory’s issued shares. The initial cost will rack $12.375 million from Apiam’s pockets, with a further $3.625 million payable over the next 12 months.
The second stage of the purchase will be subject to agreed upon performance thresholds. The initial payment will be $9.9 million in cash and $2.475 million in Apiam shares.
Funding the deal is the recent expansion of the company’s debt facility with long time financiers, NAB. Last month, Apiam announced an increase in its acquisition facility with NAB by $14 million. The total now sits at $39 million.
The decision to increase the company’s facility with NAB was made after Apiam released a negative quarterly performance to the ASX.
Apiam underwent a 1.6 per cent yearly decrease on gross profits for the final quarter of the 2019 financial year.
The company detailed no changes will be made to ACE Laboratory’s management or personnel structure, maintaining business as usual after today’s purchase.
“The track record of ACE Laboratory Services in terms of performance and innovation is world class and we believe there are many growth opportunities as trends in farming evolve, especially with demand for alternatives to antimicrobials growing rapidly,” Dr Chris added.
For the 2019 financial year, ACE Laboratory generated $5.6 million in revenue. The company has extensive industry credentials due to backing from the Victorian Government.
Operations from ACE Laboratory are currently headquartered in Bendigo, Victoria and the final acquisition by Apiam is slated for the end of September.
Share prices in Apiam are up by 2.27 per cent in the ASX today, reaching 45 cents per share. The company’s market cap is currently valued at $46.59 million.