All amounts are in U.S. dollars
QUEBEC CITY, July 12 /CNW Telbec/ - Atrium Innovations Inc. (TSX: ATB) today announced the acquisition, effective today, of German-based Mucos Emulsions GmbH. ("Mucos"). Mucos, whose main brand is Wobenzym(TM), has been marketing enzyme based products for over 50 years and had 2006 annual revenues of approximately (euro)62 million (US$85 million). By acquiring Mucos, Atrium establishes its' Health & Nutrition Division in Europe with a leading brand and gains a privileged access to the German market, the largest European market for dietary supplements. The transaction is immediately accretive, enabling Atrium to increase its normalized earnings before interest, income taxes, depreciation and amortization (EBITDA) by approximately US$27 million to about US$79 million on a pro forma basis and therefore also increasing fully diluted earnings per share by 45%. Following the transaction, Atrium's pro forma revenues will exceed US$420 million.
"This strategic acquisition allows Atrium to establish a significant presence in Europe with a long established and leading brand in the fast growing health and nutrition market. This is the first step taken by the Health & Nutrition Division to achieve market leadership in Europe. It should be followed by further acquisitions and strong organic growth as we did in the United States and Canada. Moreover, this acquisition marks a major step in our Company's growth strategy aimed at positioning each of our two divisions as worldwide leaders," stated Pierre Fitzgibbon, Atrium's President and Chief Executive Officer.
Under the agreement, Atrium will acquire Mucos for the total amount of (euro)127.5 million (US$175 million), representing approximately 6.5 times the normalized EBITDA generated by Mucos. The total amount will be paid in cash and will come from cash on hand and a newly negotiated credit facility of US$350 million that can be increased to US$425 million under certain conditions.
"As with all our previous acquisitions, the acquisition of Mucos generates immediate and significant added-value for our shareholders. As of March 31, 2007, on a pro forma basis, not only would revenues have increased from US$336 million to US$421 million, but EBITDA would also have grown by more than 50% to US$79 million. Also, fully diluted earnings per share would have increased by 45% to US$1.23 on a pro forma basis. Taking into account the profitability of operations, pro forma cash flows would have increased to US $41 million per annum from the current US$32 million," underlined John Dempsey, Vice-President, Finance and Chief Financial Officer at Atrium.
A Strategic Acquisition
Mucos was established in Munich, Germany in 1949 and specializes in enzyme based products. Mucos's lead product, Wobenzym(TM), is Germany's most popular natural anti-inflammatory product. The efficacy of Wobenzym(TM) is proven by numerous clinical studies. Mucos' products are mainly sold in Germany and Eastern Europe, but are also sold in Asia, Latin America and North America. The company has approximately 60 employees of which 42 are dedicated to sales and marketing. In 2006, Mucos had revenues and normalized EBITDA of approximately (euro)62 million (US$85 million) and (euro)20 million (US$27 million), respectively.
"Recognized across the industry for the quality and efficacy of its products, Mucos is experiencing growth and has excellent profit margins. The addition of the Mucos brand to Atrium's US-based brands, Douglas Laboratories and Pure Encapsulations, provides Atrium with remarkable growth opportunities considering the complementarities of the international commercial networks. Mucos relies on a strong and growing sales force to cover Germany and uses distributors for other countries. We intend to optimize the market penetration of different territories based on the strengths of our existing operations," stated Richard Bordeleau, President of Atrium's Healthcare & Nutrition Division.
"In addition, Atrium will be able to benefit from the expertise and support of Mucos' current management who will stay on to ensure the successful integration of the subsidiary and maintain its growth. Their vast operational and marketing expertise, as well as their excellent knowledge of the European market will be a valuable asset to the Company," added Richard Bordeleau.
Conference Call on the Acquisition
Atrium will hold a conference call and webcast that will include a slide presentation to discuss the Mucos acquisition today at 2:00 p.m. Eastern time. Participants may access the call by using the following numbers: 416-644-3419, 514-807-8791 or 1-800-594-3615. The live webcast including the slide presentation is also available via the Company's website at www.atrium-innov.com in the "Investors" section. A replay of the webcast will also be available on our website for a period of 30 days.
Atrium Innovations Inc. is a recognized leading developer, manufacturer and marketer of science-based products for the cosmetics, pharmaceutical, chemical and nutrition industries. The Company focuses primarily on growing segments of the health and personal care markets which are benefiting from the trends towards healthy living and the ageing of the population. Atrium markets a broad portfolio of active ingredients, specialty chemicals and health and nutrition finished products through its highly specialized sales and marketing network in more than 50 countries, primarily in North America, Europe and Asia. Atrium has over 600 employees and operates four manufacturing facilities. Additional information about Atrium is available on its Web site at www.atrium-innov.com.
Cautionary Note and Forward-Looking Statements
This press release contains certain forward-looking statements with respect to the Company. These forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by these forward-looking statements. The Company considers the assumptions on which these forward-looking statements are based to be reasonable, but cautions the reader that these assumptions regarding future events, many of which are beyond its control, may ultimately prove to be incorrect since they are subject to risks and uncertainties that affect the Company. For additional information with respect to these and other factors, see the Company's quarterly and annual filings with the Canadian securities commissions. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law.