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Anteo Diagnostics Adds €10M To Acquisition Funding

Anteo Diagnostics (ASX:ADO) has received approval for a €10 million (A$15.2 million) senior secured convertible note financing facility for the acquisition of DIAsource ImmunoAssays.

The approval is subject to the parties entering into formal documentation and other conditions which are typical for such a facility.

The funds raised under the Convertible Note combined with capital raised from the current Entitlement Issue are expected to enable Anteo to complete the acquisition.

The global medical technology company launched a A$12 million entitlement issue last month as part of a $26.7 million acquisition funding package.

The entitlement issue was priced at A$0.075 per share and recently extended its closing date to December 21.

The newly approved Convertible Note provides for the repayment of principal and interest over a 48 month period.

It also has a 10% per annum coupon and can be converted into ordinary Anteo shares at any time up to 48 months from the date of issue, with a minimum conversion price of $0.15 and tranche of €500,000 (A$760,860).

It is anticipated that the Convertible Note will be repaid by Anteo from the cash flow generated by the combined operations of Anteo and DIASource.

Key acquisition

Anteo flagged its proposed acquisition of DIAsource ImmunoAssays earlier this year as a €15.4 million (A$22.7 million) deal that would transition Anteo towards becoming cashflow positive by providing the company with an established global distribution platform, manufacturing capabilities and a significantly broadened product range.

The pairing of Anteo and DIAsource is expected to benefit greatly from expanded management expertise, knowledge, skillsets and access to unique technologies.

DIAsource's existing platform provides significant opportunities for Anteo's Mix&Go technology, delivering tailored customer offerings and accelerating sales of the Mix&Go product range.

Mix&Go represents Anteo's healthcare nanoglue family, which uses coordination chemistry (rather than covalent chemistry or passive binding) for gentle and secure multipoint binding of biomolecules to synthetic surfaces.

This technology employs fine-scale nanotechnology in bioseparations processes, which are critical in medical lab work.

The market for bioseparation systems is expected to value US$6 billion by 2018.

DIAsource is expected to harvest the inherent advantages of this technology in its lucrative industrial immunoassay manufacturing business.

DIAsource achieved 2014 revenue of €11.9 million ($17.5 million) and €7.2 million ($10.6 million) in first half of 2015, with EBITDA margins of 20%.


With the newly awarded facility, the acquisition of DIAsource is now set be brought to a successful conclusion that will move Anteo forward with increases strength and vigour.

The convertible note is an attractively priced hybrid instrument that provides Anteo with significant flexibility with regard to both capital structuring and cashflow management.

The $12 million entitlement issue, meanwhile, provides shareholders an opportunity to participate in Anteo's growth at an attractive discount.

This milestone also serves as a validation of Anteo's business model and the prospects for its Mix&Go technology in the context of an enlarged company with DIAsource's resources.

The DIAsource deal also represents an expansion of Anteo's global expansion strategy as it was preceded by a partnership with Germany's SCIENION to co-develop protein microarray diagnostic consumables using Mix&Go technology as well as an agreement with US$16.7 billion life science and technology company Sigma-Aldrich Corporation.

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