HeiQ: Acquisition Life Material Technologies Limited
Acquisition Life Material Technologies Limited
Further expansion into healthcare surface hygiene market and bio-based antimicrobials
HeiQ Plc (LSE:HEIQ), an established global brand in materials and textile innovation which operates in high-growth markets, is pleased to announce that it has strengthened its antimicrobial technologies platform through the acquisition of 100% of the share capital and voting rights of Life Material Technologies Limited, Hong Kong (“LIFE”, “the Acquisition”).
The Acquisition is for an upfront consideration of US$6.45 million, with US$2.55 million payable in cash (the “Cash Consideration”) and US$3.9 million to be satisfied through the issue of new ordinary shares by HeiQ (the “Share Consideration”). Additional earn-out consideration of up to US$2.8 million may be payable equally in cash and through the issue of new ordinary shares in 2022 based on LIFE’s financial performance during 2021. The number of new ordinary to be issued by HeiQ to satisfy the Share Consideration shall be calculated using the intraday volume-weighted average price (the “VWAP”) of HeiQ shares on the London Stock Exchange in the last five trading days preceding the closing of the Acquisition, which is expected to take place on or around 30th June 2021.
The Acquisition is made in line with HeiQ’s strategy to increase its presence in the bio-based antimicrobial & healthcare surface hygiene market, and to further diversify and innovate its product range and capabilities with a view to becoming a global leader in materials innovation. LIFE is a materials technology company that has developed a strong portfolio of smart ingredients and formulations with applications in numerous industries. This includes the development and distribution of bio-based antimicrobial additives and treatments used by manufacturers of plastics, coatings, textiles, ceramics and paper, that inhibit or manage bacteria, fungi, algae, and other micro-organisms that come in contact with treated materials. LIFE has the broadest technology platform in the industry, using inorganic, organic and bio-based botanical active substances.
HeiQ is already an established global leader in the US$10 billion antimicrobial fabrics market and the $24 billion textile chemicals market. This Acquisition builds on HeiQ’s recent acquisition of Chrisal and RAS Materials as well as its partnerships with Girbau, ICP Industrial Inc.,Berger Paints India Ltd and Woellner, which will see HeiQ technology applied to additional materials beyond textiles.
- LIFE recorded revenue of US$3.6 million for the 12 months to 31.12.2020 and realised net income of US$0.4 million – unaudited. Estimated net income for the first three months of 2021 exceeds US$0.2 million.
- LIFE has company entities in Hong Kong, Thailand and Brazil, and counts the UK retailers Marks & Spencer and John Lewis, Columbia Sportswear, Pangaia, Bata, American Standard, Igloo Products, and DuPont among its key brand customers.
- The current CEO and founder, Mr. Tom E. S. Ellefsen, shall become a member of the HeiQ executive management team and will continue to lead the business, supported by the existing LIFE and the enlarged HeiQ Group team.
HeiQ co-founder and CEO Carlo Centonze said:
“Our strategy to become a global leader in materials innovation and to grow our healthcare surface hygiene proposition is rapidly gaining momentum, buoyed by this exciting acquisition. We are delighted to gain exposure to LIFE’s technology platform of complementary, strongly bio-based and highly effective antimicrobial technologies.
“Our recent partnerships have demonstrated the appetite for our antimicrobials and especially HeiQ Viroblock in industries outside of textiles. The level of sustained interest we have seen from B2B, B2C and B2B2C brands, fills us with confidence that antimicrobial technology is becoming mainstream for all materials that we touch in our daily lives. Therefore, this acquisition of a profitable business, which is led by a talented and entrepreneurial Founder, strengthens the gains we have already made in owning the antimicrobial space. It provides us with access to new brands and market share in additional territories, as well as plenty of cross-selling opportunities, building on those we have already achieved through the 51% ownership of HeiQ Chrisal and 100% ownership of RAS Materials.
“Our M&A strategy, which is focused on complementing the organic growth we continue to experience across our existing portfolio, is focused on making us more technology-rich, more global and more consumer facing, and we look forward to providing further updates on additional transactions which fit with this, in the future.”
Tom E. S. Ellefsen, CEO of LIFE, commented:
“We are delighted to bring our expertise in antimicrobial technologies for polymers, coatings and textiles to the HeiQ Group. With the HeiQ Viroblock technology, HeiQ has established a market leading position for antimicrobial textiles, and we at LIFE will help HeiQ extend this market leadership position into polymers, coatings and other materials.”
“Both HeiQ and LIFE are oriented around innovation and technology, and this is why there is such a strong fit between the two companies. We have already identified multiple opportunities to combine and leverage technologies from both companies to fuel future revenue growth.”
Further Information on LIFE:
LIFE is a materials technology company that has developed a portfolio of smart materials with applications in numerous industries. The company’s core activity is development and production of antimicrobial additives and treatments used by manufacturers of plastics, coatings, textiles, ceramics and paper. The company has the broadest technology platform in the industry, using inorganic, organic and bio-based botanical active substances.
LIFE’s 40+ products strengthen HeiQ’s global product offering and will facilitate HeiQ’s existing technology platforms into new markets, especially masterbatches, plastics and coatings.
The Acquisition will provide HeiQ with access to a technology platform of hygiene solutions which consists mainly of antimicrobial additives/treatments which inhibit or kill bacteria, fungi, algae, and other micro-organisms that come in contact with the materials.
Because the antimicrobial additives/treatments are built in or applied during manufacturing of the materials, the antimicrobial effect lasts for the useful life of the treated materials. Leading manufacturers and brands, such as DuPont, American Standard, Igloo Products, Marks & Spencer, John Lewis, and Columbia Sportswear use LIFE’s antimicrobial additives and treatments to:
- Reduce bacteria-derived odors in textiles
- Prevent mold in materials used in buildings
- Inhibit bacterial growth in food handling areas
- Inhibit allergy-inducing molds in bedding and carpets
- Reduce infectious bacteria on surfaces in hospital and medical environments
- Improve hygiene and peace of mind for a number of consumer and industrial products
Through LIFE, HeiQ will also have access to hygiene technologies, such as odor absorbent additives, that complement HeiQ’s core antimicrobial technology. LIFE’s odor absorbent additives are predominantly used in polymer applications, where they have several important uses:
- Reduce emission of VOCs from plastics
- Eliminate odor from recycled plastics which indirectly encourage the use of recycled plastic materials
- Remove taint-causing compounds from food contact plastics
- Reduce smell from plant-based polymer additives which reduces a key barrier for the wider application of plant-based materials
Issue of Equity and Total Voting Rights
The Company will make a separate announcement in regard to the new total number of shares in issue and total voting votes on the closing of the acquisition.
Below is an interview with HeiQ’s CEO & FD, who provide the highlights from the recent results
HeiQ Investor Videos