Business Weekly - Cambridge, UK

The Cambridge-based pharma, said that it would make an initial payment of £9.2m for the acquisition, to be satisfied by the issue of 15m new shares and a second, earnout-dependent payment payable by a further share issue in April 2008.

The Austrian firm, which posted sales of £9.2m last year, will add considerably to BioProgress's distribution and infrastructure in Germany, the largest OTC market in the EU, as well as boosting sales and marketing functions in Germany, Italy, England and Austria with further throughput into the emerging markets of Eastern Europe.

Richard Trevellion, CEO of BioProgress said: “Joining Melbrosin with the BioProgress Group gives both companies critical mass in high value and growth niche markets.”

BioProgress separately announced a further placing of 8.8m shares, which represents around 5.3 per cent of the firm's current issued share capital, the £4.9m proceeds from which will be utilised to accelerate the launch of the newly-enlarged company's OTC products, the firm said.

It also announced plans to rebrand the enhanced firm as Meldex Group later this year.

Synergies between the firms and benefits of an amalgamation became apparent during the recent cooperative promotion of BioProgress's Slimthru product, which achieved market leadership in Austria in the first 4 months of sales.

The joint MDs of Melbrosin, Klaus Kuhne and Helmut Kerschbaumer said : “Working with BioProgress over the past few months demonstrated how both companies can significantly grow value by leveraging core skills and assets together.”

“We have complementary geographical strengths, business philosophy and strategy which should enable accelerated and profitable growth.”