Venn chief looks to a future sell-off after takeover
Listed clinical trials firm Venn Life Sciences will be put up for sale in the next two or three years, according to new CEO Cathal Friel.
Mr Friel took over as CEO of Venn last month when the group was acquired by pharma services business Open Orphan Services in a reverse takeover.
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Venn shareholders are expected to vote to approve the takeover later this month, as well as a name change to Open Orphan.
Mr Friel told the Irish Independent that Venn plans to acquire as many as three more businesses over the next two years to bring the group's revenue up to £50m (€56m) before it is put up for sale itself.
The group announced plans yesterday to raise £4.5m (€5m) though a share issue.
The placing shares will represent approximately 32pc of the enlarged business.
The funds raised will "position the company to take full advantage of the platform created from the combination of Venn and Open Orphan," Mr Friel said.
Venn also released its full-year audited results for 2018 yesterday. The group reported an earnings loss - before exceptional items - of €1.43m in the 12 months to 31 December 2018. It made profits of €830,000 the previous year.
Total revenue at the group was €14.3m in 2018, a decline from €17.8m reported in 2017.
"Venn has had a disappointing two to three years from a shareholder perspective," Mr Friel said.
However, he added that he was "confident" a number of large contracts were about to be signed by the group.
"We are optimistic that with the commencement of deferred projects and a new business focus on Rare and Orphan indications, as demonstrated by the proposed acquisition of Open Orphan, that the business can return to revenue growth in the near term," he said.
Loss for the year after tax was €4.8m, while the group had cash and cash equivalents of €1.1m at year-end.
So far this year the company said it has experienced a continuation of prior year trends with low utilisation resulting in revenue and earnings before interest, taxation, depreciation, and amortisation (ebitda) being behind management forecasts for the year to date.
The company said it still requires "careful management of available cash resources and the directors expect additional financial resources to be required in order for the company to successfully execute its growth strategy".