Genetic Technologies Strengthens Global Leadership in Genomics with Acquisition of EasyDNA
Genetic Technologies Limited (ASX: GTG; NASDAQ: GENE) announced the acquisition of the eCommerce business EasyDNA for US$4 million. This acquisition aims to expand GTG's direct-to-consumer portfolio across 40 countries, leveraging EasyDNA's established revenue stream of US$4.63 million in CY20. The deal includes websites, brand identities, and distribution agreements related to EasyDNA. The transaction involves US$2 million in cash, US$1.5 million in GTG ADRs, and a US$500k hold in escrow. CEO Simon Morriss highlighted growth opportunities in wellness testing and a robust distribution platform.
- Acquisition supports expansion into wellness testing and direct-to-consumer market.
- EasyDNA generated US$4.63 million revenue in CY20, indicating established business.
- Revenue from EasyDNA increased by 11% over the last two years.
- Access to over 70 websites in 40 countries enhances GTG's market presence.
- The issuance of ADRs will dilute existing shareholders by 2.3%.
- The acquisition requires US$500k to be held in escrow, potentially delaying full payment.
A global platform to market the Company’s portfolio across 40 countries
MELBOURNE, Australia, July 19, 2021 (GLOBE NEWSWIRE) -- Genetic Technologies Limited (ASX: GTG; NASDAQ: GENE, “Company”, “GTG”), a global leader in Genomics tests in health, wellness and serious disease, has signed an agreement to acquire the direct-to-consumer eCommerce business and distribution rights associated with General Genetics Corporation (GGC) and its associated brands trading as EasyDNA (‘EasyDNA’ or ‘EasyDNA Acquisition’), from BelHealth Investment Fund LP (‘BelHealth’), as majority owner for US
Highlights
- Strategically, this Direct-to-Consumer acquisition provides Genetic Technologies the foundation to grow its portfolio of serious disease tests across well-established websites in 40 countries
- In CY20, EasyDNA had total revenue of US
$4.63 million through online retail sales of its at-home DNA tests - EasyDNA currently sells paternity, oncology and health & wellness genomics-based laboratory tests through agreements with 12 laboratories in North America, AsiaPac and Europe
- Under the terms of the agreement, GTG will acquire all of GGC and EasyDNA’s websites, brand identities, laboratory testing and distribution agreements associated with their EasyDNA business for US
$4 million comprising of US$2 million in cash on completion, US$1.5 million paid in GTG ADRs and US$500 k in cash to be held in escrow payable to BelHealth on the first anniversary of closing following conditions precedent being satisfied - EasyDNA revenue has grown by
11% in the last two years, and GTG will target opportunities for further growth.
GTG signed an agreement to acquire the brand and distribution rights for EasyDNA from BelHealth. The EasyDNA acquisition will provide GTG the platform to build its direct-to-consumer offerings and wellness division. This acquisition provides an established revenue stream with US
Simon Morriss, Chief Executive Officer of GTG, said, “We are excited to announce the acquisition of EasyDNA. The strong alignment of this brand and platform with GTG’s planned expansion into wellness testing was critical to our decision to acquire the business of EasyDNA.”
EasyDNA generates revenue from the sale of test kits to customers via its network of websites. Tests are typically performed via an oral swab sent directly to the customer from external laboratory partners. The laboratory processes the tests and transmits the results to EasyDNA, with test results communicated to customers by email.
Morriss continued, “We look forward to integrating the EasyDNA team into our business and working closely with them to continue to build upon their existing product portfolio and the brand recognition they have already achieved. EasyDNA is a leader paternity testing and animal genomics, and their breadth of available products also extends into the important wellness category, providing multiple highly attractive growth opportunities for GTC moving forward.”
The agreement provides for the acquisition of all brands, websites and reseller agreements associated with EasyDNA. This includes over 70 websites in 40 countries and six brand identities. EasyDNA revenue contributions are strongly weighted to five countries: Australia, UK, France, Canada and the US, where it received
“With several of our existing tests already CE marked, gaining established sales channels into the EU provides a solid foundation for rapid growth,” added Morriss. “Further, with notable recent progress on our Predictive Panel Risk Test, covering six different cancers, having a strong distribution platform in place with global reach will significantly strengthen our roll out strategy as we move this exciting test into commercialization.”
Additionally, GTG will be onboarding EasyDNA’s existing team, retaining the skills and expertise of its employees based in Malta and Australia. This includes the retention of Kevin Camilleri, founder and CEO of EasyDNA, who will be heading up GTG’s Direct to Consumer Division following the completion of the acquisition. Except for this, no changes will be made to the GTG board and key management personnel.
Under the terms of the agreement, GTG will acquire
The total cash consideration of US
The transaction is subject to satisfying customary closing conditions. It is anticipated that these conditions will be met on or before 31 July 2021.
GTG will continue to assess further acquisition targets with a focus on assets that enhance its core platform offerings; extend its product offering; open access to new customers; and expand its position in key geographic markets.
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1 Conditions precedent incorporate receipt of all standard documentation and statements of consent from all parties, no material change to the business or financial situation, no breach of warranty; receipt of all employment contracts; confirmation of signing all agreed contracts and confirmation of no legal proceedings.
Investor Relations (AUS) Stephanie Ottens Market Eye M: +61 434 405 400 E: stephanie.ottens@marketeye.com.au | Investor Relations and Media (US) Dave Gentry 1 800 RED CHIP (733 2447) Cell: 407 491 4498 E: dave@redchip.com |
About Genetic Technologies Limited
Genetic Technologies Limited (ASX: GTG; Nasdaq: GENE) is a diversified molecular diagnostics company. GTG offers cancer predictive testing and assessment tools to help physicians proactively manage patient health. The Company’s lead products GeneType for Breast Cancer for non-hereditary breast cancer and GeneType for Colorectal Cancer are clinically validated risk assessment tests and are first in class. Genetic Technologies is developing a pipeline of risk assessment products.
For more information, please visit www.gtglabs.com
About EasyDNA
EasyDNA was established in 2007 in Malta and 2008 in Australia developing an online network of over 70 websites in over 40 countries. EasyDNA’s network of online retail sales platforms offers fast and affordable home DNA testing that is reliable and confidential. They also offer a number of lifestyle and health and wellbeing tests, and animal testing relating to allergies and tolerances.
For more information, please visit www.EasyDNA.com
About BelHealth Investment Fund LP
BelHealth Investment Partners is a healthcare private equity firm focused on lower middle market companies with a unique combination of investing, executive management and entrepreneurial experience. BelHealth acquires majority positions in entrepreneur-owned companies that it believes would benefit from its extensive operating and private equity investment expertise. BelHealth partners with executives and provides growth and expansion expertise both organically and through add-on acquisitions, capital to fund its investment strategy, and domain knowledge in targeted healthcare sectors.
Forward-Looking Statements
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