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(Sharecast News) - Surgical and wound care specialist Advanced Medical Solutions Group (AMS) has acquired independent wound care and bio-diagnostics coatings company Raleigh Adhesive Coatings for £22m in cash, it announced on Monday.
The AIM-traded firm said the acquisition would strengthen its position in the wound care sector by bringing in-house specialist services of acrylic and silicone coating, perforation processing, and some bulk materials converting capabilities, which were currently outsourced.
Silicone coating and perforation capabilities were "particularly important" to AMS, the board explained, as they are "intrinsic" to all modern advanced wound care foam dressings.
Raleigh is an existing key supplier, producing the coated adhesive mesh used in the new 'LiquiBand XL' device, which was described as an "important part" of the group's continued US growth strategy, and currently undergoing clinical trials.
In addition, Raleigh's expertise would allow the company to enter the bio-diagnostic testing sector.
The acquisition would bring "strong synergies" with AMS's finished product offering, with the opportunity to increase the efficiency of the company's wound care manufacturing operations and provide entry points into new customers and markets, cross-selling of products and services, as well as a research and development pipeline of new projects in the medical space.
AMS said the acquisition was for a total consideration of £22m in cash, payable on completion, on a debt-free and cash-free basis.
It would be funded from its existing cash resources, which totalled £67.9m at 30 June.
"We have been looking for synergistic technologies that add value to our wound care business, and this acquisition strengthens our position and product offering in that sector significantly," said chief executive officer Chris Meredith.
"Having outsourced silicone coating and perforation for some time, we are pleased to bring this capability in-house."
Meredith said Raleigh had also played an important part in improving the design of the company's LiquiBand XL mesh, which it saw as an important part of its continued US growth strategy.
"Raleigh's expertise in other sectors such as bio-diagnostic strips also opens up further new commercial opportunities for the group."
At 1239 GMT, shares in Advanced Medical Solutions Group were up 7.33% at 249p.
12 Jun 2020 16:05