Tristel raises £3.9 million for massive expansion
Tristel plc, which makes infection control, contamination control and hygiene products, has raised £3.9 million before expenses through a share issue to underwrite international expansion.
The plans include doubling capacity at its HQ in Snailwell, near Newmarket and providing facilities to manufacture sterile packed products for use in clean room environments. The company aims to expand into the pharmaceutical, cosmetics and toiletries (PCT) market having recruited a sales team focused on this market earlier in 2010.The net proceeds of the placing will be used to reduce bank borrowings, restructure royalty payments and fund the expansion of the business. This will incorporate the expansion into the PCT market and a roll out of products into Europe and Asia. Tristel’s recent results provided a roadmap to future growth: Export sales increased by 58 per cent in the year to June 30, albeit from a fairly modest base.A royalty restructuring is also underway. Tristel currently pays a royalty in perpetuity on certain of its products that incorporate its proprietary chlorine dioxide chemistry. The royalties are currently payable at a rate of five per cent of the value of net sales made and are paid to the inventor of the technology, Bruce Green, who is a director of the company. The company has reached agreement to halve the royalty rate, introduce a fixed term for the contract and eliminate all consultancy fees due to Green, for a one-off payment of £700,000, payable in cash. The whole package has to be ratified at a general meeting on November 22.Chief executive Paul Swinney said: “We were encouraged by investors to undertake this placing, with the funds raised ensuring the business is debt free going forward, our expansion plans are well supported and Tristel plc is in good shape in order to drive future growth. “It is also a very positive reflection on the strength of the business that the placing was heavily oversubscribed.”