Epigenomics in €171m take-over

Stocks of the Berlin-based company took a jump up of 40% after the announcement of Cathay Fortune International Company Ltd. (CFIC), which had already acquired a minority interest of 2.15% in Epigenomics AG in November 2016. The take over of Epigenomics will be done by Cathay’s subsidiary Blitz F16-83 GmbH (coming Summit Hero Holding GmbH).

Blitz has agreed to submit a voluntary public takeover offer at €7.52 euros per share in cash. This would correspond to a company valuation of around €171m and a premium of 49.9% on the three-month exchange rate before the bid was announced. The offer applies to all outstanding shares of Epigenomics. The minimum threshold is 75%. The free float includes 84.27% of the shares.

The transaction is set to keep Epigenomics’ management and 35 staff in Berlin an 10 employees in Germantown (US)  in place. “We fully support the transaction as it creates immediate value for our shareholders and at the same time strengthens Epigenomics’ long-term prospects,” said Heino of Prondzynski, Chairman of the Supervisory Board of Epigenomics.

In 2016 sales of Epigenomics’ single product Epi proColon, a FDA-approved blood-based screening test for colorectal cancer marketed in the US, Europe, China and selected other countries increased by 41% and reached €2.2. However, Net loss increased to €-11.2 (2015: €-9m because sales figures could not compensate the high burn rate due to product development.

If the transaction is successful, Blitz has agreed to give a cash-injection of up to €6.46m. “We are convinced that this transaction is in the best interest of Epigenomics and its shareholders,” stated Greg Hamilton, Chief Executive Officer of Epigenomics. “It provides our company with access to the capital resources necessary to successfully commercialise our products on a global scale. In addition, the transaction will allow us to expand our R&D activities in order to unfold the potential of our unique cancer biomarker technology in the future.”