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Name change for SA medical laser firm after $100m selloff

Business

South Australian company Ellex Medical Lasers will change its name after shareholders voted to sell off a large portion the business to a French multi-national for A$100 million.

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The sale of the Ellex Lasers & Ultrasound business to Lumibird Group includes the company’s hi-tech manufacturing facility in Mawson Lakes.

Ellex Medical Lasers is a world leader in medical technologies for the diagnosis and treatment of eye disease, with a staff of about 275.

First mooted on December 24 last year, the sale also includes three of the group’s biggest earning products – lasers used in the treatments of glaucoma, cataracts and diabetic eye disease.

The Ellex Lasers & Ultrasound segment contributed about 80 per cent of group sales and represented 77 per cent of group assets as at 30 June 2019.

The remaining South Australian company will be renamed Nova Eye Medical Limited as the Ellex brand transfers to Lumibird on completion of the transaction.

It is not clear how many existing staff will be part of the new company.

Shareholders supported the move last Friday with more than 99 per cent voting in favour of the sale and name change.

The company has been granted approval by the Australian Securities Exchange (ASX) for a change to its ASX ticker from “ELX” to “EYE”.

About $61 million of the proceeds of the sale of the Ellex Lasers & Ultrasound Business will be distributed to shareholders by way of the payment of a fully franked dividend and a capital return through an equal capital reduction.

The equal capital reduction of $41.5 million equates to approximately $0.29 per Ellex share, while the $19.5 million fully franked dividend equates to $0.14 per Ellex share.

Executive Chairman Victor Previn told shareholders ahead of the April 24 vote the primary focus of Nova Eye Medical Limited would be on glaucoma disease via the iTrack business, with manufacturing in Fremont, California and a sales network across the USA, Europe and Asia Pacific.

Nova Eye Medical also retains the proprietary 2RT laser technology as a therapy for patients with intermediate age-related macular degeneration.

“On a post transaction basis, Nova Eye Medical will be debt-free with approximately $21 million in cash, including $2 million held in an escrow account for 12 months,” Previn told shareholders last week.

“We continue to assess potential product acquisitions that provide synergies for our dedicated glaucoma device sales channel.

“This activity is expected to result in at least one transaction during the 2020 financial year. Longer term, the plan is to build a portfolio of products within the high growth glaucoma consumable device market, while carefully investing into the business to drive revenue growth.”

In a further update to the ASX this morning, the company said the Australian Competition and Consumer Commission (ACCC) had advised both parties that it will today commence a public review of the acquisition, with an indicative decision date of 25 June 2020.

The statement said while a number of the conditions precedent to completion have been satisfied, the parties are continuing to work on the remaining conditions under the Share Sale and Purchase Agreement.

Lumibird is one of the world’s leading laser specialists, manufacturing and distributing high-performance lasers in medical, industrial and scientific markets. It has more than 500 employees worldwide.

Ellex’s share price was down 13 per cent to $0.54 following this morning’s announcement.

Ellex Medical Lasers was ranked No.57 in in InDaily’s 2019 South Australian Business Index of the state’s top 100 companies.  

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