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14 December, 2018 - 10:55 By Tony Quested

Sagentia owner off the market but strategic review continues

Science Group plc, which owns Cambridge innovation consultancy Sagentia, has called a halt to a potential sale of the business because the climate for a deal that would optimise value for the group is considered too uncertain.

The decision to end the formal sale process – triggered in September – hit UK shares slightly but the strategic review of options for the business is continuing.

The company has a healthy treasure chest and debt is secured against freehold property assets so the group does not feel under pressure to sell for a deflated price in a volatile climate. 

Expressions of interest from organisations around the world were received but none tempting enough to force the company’s hand in the present economic climate.

Science Group plc is an international consulting services group supporting the entire product innovation lifecycle. 

Services include: applied science, product development, advisory and regulatory. These are combined with vertical market expertise in the medical, food & beverage, industrial, chemical, energy and consumer sectors. 

With offices throughout Europe and North America and staff fluent in over 30 languages Science Group supports a global client base in over 100 countries.

Trading for the 11 months to November 30 was in line with the board's expectations. Cash balance at period end was £19.3 million with net funds of £6.4m. 

The debt of £13m, expiring in 2026, is secured on the group's freehold property assets with the interest rate fixed by matching swap instruments. The board stressed that the formal sale process was only one element of an holistic corporate review.

The purpose was to explore the merits of the group remaining as an independent organisation, relative to the alternative options available to the group being reviewed. 

Panmure Gordon has undertaken the process and interest from a number of organisations, across a range of geographies, has been explored.

But in a statement to London Stock Exchange, Science Group plc says: “During the sale process period stock markets around the world have been volatile, with a global negative trend. In parallel, in recent weeks, the uncertainty regarding Brexit has substantially increased, the eventual conclusion of which may have a significant impact on Sterling exchange rates.

“As a result, in the current uncertain political and economic climate, the board has concluded that it is unlikely that the formal sale process (FSP) would produce the most attractive outcome from the strategic review.  The board has therefore decided to terminate the FSP and the company is no longer in an offer period. The strategic review is continuing.”

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