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Concateno makes further acquisition

By Rebecca Curwin on May 10 2007

Serial acquirer Concateno plc, a holding company for drug and alcohol testing firms, has bought Euromed, a company that develops devices to detect drug abuse, for £11.5 million.

To fund the deal and some future acquisitions, AIM-listed Concateno placed about 8.5 million shares at 145p each, raising £12.25 million. It also placed some 2.6 million shares at the same price for Euromed’s vendors, worth £3.75 million. In addition, Concateno has increased its debt funding by £6 million.

Chief executive of Concateno Fiona Begley said: “Euromed is the next piece in the jigsaw which makes Concateno the only full service drug and alcohol testing business in the UK. The large and diverse customer base, HM Prison contract and experienced management team will enable significant synergies in terms of logistics, service and customer cross selling with the existing Concateno businesses.”

Rosenblatt Solicitors was legal adviser to Euromed, while Saffery Champness Corporate Finance acted as its financial adviser.

Founded in 1996, London-based Euromed employs 13 people. Its devices are primarily used for the criminal justice and rehabilitation sectors, and are used by more than 1,500 customers. Euromed had sales of some £3.6 million and an EBITDA of £1.2 million for the year ended March 31, 2006.

Concateno expects Euromed to complement its previous acquisitions, particularly its drug and alcohol testing companies; Medscreen, which was bought for £30 million in November 2006; Altrix, acquired for £11 million in February 2007 and Tricho-Tech, bought for £11.25 million in February 2007.

Euromed’s chief operating officer John Fritz added: “With Medscreen, Altrix and TrichoTech as partner organisations, Euromed will be able to further expand its product and service supply and in so doing, provide a greater depth of customisation.”

Based in London, Concateno aims to consolidate the fragmented drug and alcohol testing market. It is in talks to buy other companies that could help leverage its laboratory-based assets, encourage growth in the UK and expand the business across Europe. Concateno made an operating loss of £376,000 for the six months to September 30, 2006.

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