International life sciences and sustainability technology investment group NetScientific has acquired 75 per cent of the issued share capital of Cetromed.
The life sciences holding company, has several portfolio companies spun out of the University of Leuven, Belgium.
A spokesperson for NetScientific said the acquisition will result in further internationalisation of NetScientific’s portfolio and exposure to a key European high-tech cluster around the University of Leuven while being consistent with the group’s capital-light strategy.
Cetromed was a holding company owned by the Azima Trust (through Zahra Holdings Ltd), the family trust of Farad Azima, the founder and ex-CEO of NetScientific.
The portfolio was formed around several life sciences investments commercialised out of the Belgium-based K.U. Leuven, a leading European research institution with strengths in Medical Technologies, Bio-Sciences and Environment, and others. Its core assets include:
FOx Biosystems (5.059 per cent stake) which provides real-time, label-free analysis technology based on an innovative fibre-optic-based surface plasmon resonance biosensor, enabling users to generate high quality biomolecular data such as affinity data, kinetic data and concentration measurements.
The stake was valued at c. €400k at the last investment round of c.€7.91m in 2020. The company was formed as a spin-out following a sponsored research agreement with K.U. Leuven that saw Cetromed invest €537k.. The company is backed by LRM, Heran Partners, K.U. Leuven’s Gemma Frisius Fund, and Leuven University.
DName-iT (61.54 per cent stake) which is developing biological barcodes to provide improved quality assurance through the entire genetic testing process. This technology offers a new level of traceability and quality control to the workflow of genetic tests based on Next Generation Sequencing (NGS) and beyond. The previous funding round was £1.3m of which Cetromed invested £0.8m for its stake in 2015.
Oncocidia (41.27 per cent stake) which is developing a targeted radiopharmaceutical cancer treatment, which involves extending the already successful use of Iodine-131 in treating thyroid cancer, to treat solid cancers elsewhere in the body. Cetromed invested £0.2m for its stake in 2015.
In the 11 months to 30 November 2021, Cetromed has incurred losses before tax of approximately £40,000 on nil turnover. On completion, there will be a write-off of liabilities of £3.4m between Cetromed and Zahra Holdings Ltd, and as a result net assets on completion will be £0.8m.
John Clarkson, Chairman of NetScientific commented: “The acquisition of Cetromed, building on the good relationship with the Azima Trust, is another exciting step in the implementation of our growth strategy.
“This judicious investment utilises NetScientific’s shares, rather than cash, to fund this European expansion. We will apply our pro-active management, structured approach and group synergies to unlock the significant latent potential and deliver added shareholder value.”
Investment in Cetromed subsidiary FOx Biosystems
In addition, it is also announced that shortly after closing the Group will advance to Cetromed a secured loan of £200,000, enabling a follow-on investment of £150,000 by Cetromed into its portfolio company, FOx Biosystems as part of a €2.63m investment round by FOx Biosystems’ investors.
The secured loan, which has a floating charge over the assets and carries interest at 8 per cent per annum, is repayable within three years.
Zahra Holdings Limited lock in
Zahra Holdings Limited has agreed to lock-in provisions, for a 12-month period following completion of the acquisition, relating to the Consideration Shares and the existing 938,952 NetScientific shares held by Zedra Trust Company (Jersey) Limited. Zahra Holdings Limited and Zedra Trust Company (Jersey) Limited are Azima Trust companies.
Justin Martin from Azima Trust commented: “The Azima family is pleased that its trustees have been able to arrange the sale of 75 per cent of the Trust’s holding in Cetromed to NetScientific PLC.
“NetScientific (in which the Trust retains a significant holding) was founded by Farad Azima. Farad Azima held the current management of NetScientific in high regard and, prior to his death, was hoping to merge the Cetromed technologies with those of NetScientific.
“The Azima family is delighted that this aspiration has now been achieved. It has every confidence that the NetScientific team will be a reliable steward of the Trust’s investment.”
