ImmunoPrecise to acquire U-Protein and announces $4,000,000 financing

VICTORIA, July 4, 2017 /CNW/ - IMMUNOPRECISE ANTIBODIES (the "Company") (TSX VENTURE: IPA)(OTC PINK: IPATF) announces that it has signed a binding letter of intent with U-Protein Express BV ("U-Protein") whereby the Company has agreed to acquire all of the issued and outstanding shares of U-Protein (the "Transaction").  This represents a key step in the board of directors' continued review of potential strategic acquisition opportunities for the Company. 

The key benefits of the acquisition of U-Protein by the Company are: (i) access to the European marketplace, (ii) materially accretive to the Company's revenue, (iii) additional portfolio of services that are complementary to the Company, and (iv) diversifies and increases service offerings of the Company.

U-Protein

U-Protein is a privately held company based in Utrecht, The Netherlands and holds the rights to proprietary expression technology used in antibody production.  U-Protein is a Contract Research Organization ("CRO") that offers fast and large-scale production of (mammalian) recombinant proteins and antibodies for research and pre-clinical applications.  During the fiscal year ended December 31, 2016, U-Protein had revenues of €1,675,354 (CAD $2,479,524) and net income of €933,749 (CAD $1,381,948) (after tax and includes extraordinary income of €290,000 (CAD $429,200)).

"This transformative acquisition is an excellent strategic fit for ImmunoPrecise as it is complementary to our expertise in custom monoclonal antibody production as well as offering an exceptional opportunity to expand our business into the European marketplace," said Tom D'Ozario, President and CEO. "The combined company will be able to offer an expanded portfolio of services, further diversifying our revenue base and achieve our strategic, long-term business objectives."

Terms of Transaction with U-Protein

Under the binding letter of intent, the Company and U-Protein have agreed to negotiate a definitive agreement (the "Definitive Agreement") whereby the Company will acquire all of the issued and outstanding shares of U-Protein for €6,830,000 (CAD$10,108,400) (the "Purchase Price"), of which (A) €2,734,732 (CAD$4,047,403) will be paid in cash on closing, (B) €2,047,634 (CAD$3,030,498) will be satisfied by the issuance of approximately 3,030,498 common shares of the Company on closing, and (C) €2,047,634 (CAD$3,030,498) in deferred payments over a three year period (the "Deferred Payments").  The Deferred Payments may be made, at the election of the U-Protein shareholder, in cash or by the issuance of up to 3,030,498 common shares over a three-year period.  The Purchase price will be paid and/or issued to each shareholder of U-Protein in proportion to their respective shareholding of U-Protein.

As part of the Transaction, the shareholders of U-Protein will be entitled to dividend any cash in U-Protein above €500,000.  If the Deferred Payments are not satisfied by the Company, the shareholders of U-Protein will be permitted to repurchase the shares of U-Protein from the Company.

The letter of intent also requires that three of the principal shareholders of U-Protein will enter into a two-year management contract, which will include non-solicitation and non-competition clauses as well as performance incentives based on the net profits of U-Protein.  The Company has also agreed to appoint one of the principal shareholders of U-Protein to its board of directors.

The parties will be entitled to carry out due diligence of each other until July 31, 2017.  Upon the parties completing due diligence to their reasonable satisfaction, the parties will enter into the Definitive Agreement setting forth the terms and conditions of the Transaction by August 31, 2017.  Completion of any transaction with U-Protein is subject to a number of conditions, including but not limited to, completion of due diligence, negotiation of definitive agreements in respect of such a transaction, the availability of financing on terms acceptable to the Company, and receipt of any required regulatory and shareholder approvals. A transaction cannot be completed until these conditions are satisfied, and there can be no assurance that a transaction will be completed at all.

Private Placement Financing

In conjunction with acquisition of U-Protein, the Company is pleased to announce that it will conduct a non‐brokered private placement of up to 4,000,000 shares (each, a "Share") at a price of $1.00 per Share for gross proceeds of up to $4,000,000.

All securities issued in connection with the private placement will be subject to a four‐month‐and‐one day statutory hold period. A finder's fee may be payable on the private placement.

Proceeds of the financing will be used for the acquisition of U-Protein and working capital purposes. 

Completion of the private placement remains subject to the approval of the TSX Venture Exchange.

About ImmunoPrecise Antibodies

ImmunoPrecise Antibodies provides its customers with custom antibody engineering and production services to support their research and development efforts. 

Antibodies are naturally occurring proteins capable of binding to specific target molecules, or antigens. They have been used very widely in research assays, diagnostics, purification and therapeutics. The target market for the Company's antibody and peptide products includes organizations in the academic, biological, diagnostic and pharmaceutical fields. This is a large growing market that is expected to double in the next ten years.

The Company operates from state of the art laboratory facilities located at the Vancouver Island Technology Park in Victoria, British Columbia which houses its tissue culture and molecular facilities as well as an animal care unit, and is a member of the Canadian Council for Animal Care.

The services offered to customers include the development of mouse and rat monoclonal and rabbit recombinant monoclonal antibodies against a wide spectrum of antigens, as well as polyclonal antibodies, immunologically based assays, and solutions to challenges faced by clients in antibody related research and development.  In addition, cryopreservation services are provided for the storage of valuable biological materials including hybridoma clones, plasmid constructs, and cell lines. The antibodies produced by the Company target a wide variety of environmental, diagnostic and research applications.

The Company employs an experienced group of R&D scientists, and over the last 25 years its investments in research have led to the creation of innovative and proprietary technologies and methods that significantly improve the speed and efficiency of monoclonal and polyclonal antibody production.

Forward Looking Information

This news release contains statements that, to the extent they are not recitations of historical fact, may constitute "forward-looking statements" within the meaning of applicable Canadian securities laws. ImmunoPrecise uses words such as "may", "would", "could", "will", "likely", "expect", "believe", "intend" and similar expressions to identify forward-looking statements. Any such forward-looking statements are based on assumptions and analyses made by ImmunoPrecise in light of its experience and its perception of historical trends, current conditions and expected future developments. However, whether actual results and developments will conform to ImmunoPrecise's expectations and predictions is subject to any number of risks, assumptions and uncertainties.  Many factors could cause ImmunoPrecise's actual results to differ materially from those expressed or implied by the forward-looking statements contained in this news release. Such factors include, among other things, the Company closing its acquisition of U-Protein, completing the Financing, and such risks and uncertainties described in the Company's Filing Statement dated December 13, 2016 which can be accessed at www.sedar.com. The "forward-looking statements" contained herein speak only as of the date of this press release and, unless required by applicable law, the Company undertakes no obligation to publicly update or revise such information, whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE ImmunoPrecise Antibodies Ltd.

ImmunoPrecise Antibodies Inc.: Phone: [phone] Markham Street. Victoria, BC V8Z 7X8, www.immunoprecise.com; For investor relations please contact: Rob Gamley, Phone: [phone], Email: [email protected], Contact Financial Corp., 1450 - 701 West Georgia St., Vancouver, BC V7Y 1G5

Related Links

www.immunoprecise.com