Observe Medical signs exclusivity agreement with Ferrari L. to negotiate acquisition of production facility
Oslo, December 14, 2022 – Observe Medical ASA ("Observe Medical" or "the Company") has entered into an exclusivity agreement to negotiate an acquisition of Ferrari L. di Ferrari Pietro S.r.l. and Ferrari Luigina S.r.l. (together "Ferrari L."), which owns and operates a production facility for medical and surgical equipment located in Verona, Italy.
Ferrari L. has been active in producing and supplying single-use medical devices since 1960 and manufactures various products, including urology sets and catheters. The production facility delivers products to companies worldwide and generated annual revenues of around EUR 2.7 million in the financial year 2021.
The contemplated acquisition of this production facility is, if completed, expected to improve Observe Medical's value chain control and minimize risks associated with the production of the Company's products. Additionally, the potential acquisition is expected to significantly reduce the Company's cost of goods (cogs) for existing and new products. A reduction in cogs would be driven by centralized in-house production, which would lead to an uplift in gross margin.
This production facility is highly complementary to Observe Medical's current operations, as it has the capacity to produce existing products, Observe Medical's current portfolio of products and the Unometer™ range of urine measurement products. It would also enable Observe Medical to initiate the development and production of new products.
"Looking back at the recent exclusivity agreement to acquire the Unometer™ range of urine measurement products, the potential acquisition of Ferrari L. is expected to significantly strengthen our growing medtech platform. With access to hundreds of distributors worldwide and production capabilities, these agreements support our growth strategy and demonstrate our ability to execute. Assuming completion of these transactions we will be ideally placed to become a leading urine measurement system provider with production capabilities," said Rune Nystad, CEO of Observe Medical.
With an exclusivity agreement in place, Observe Medical will aim to close the final acquisition agreement for Ferrari L. in the first quarter of 2023. The completion of the acquisition of Ferrari L. is amongst other conditional upon agreement between the parties on a final transaction agreement and completion of such agreement. Consequently, no assurance can at this stage be given that the acquisition of Ferrari L. is completed.
For further information, please contact:
Rune Nystad, CEO Observe Medical
Mobile: +47 916 24 683
E-mail: rune.nystad@observemedical.com
Per Arne Nygård, CFO of Observe Medical
Mobile: +47 411 04 345
E-mail: perarne.nygard@observemedical.com
About Observe Medical
Observe Medical is a Nordic medtech company that develops, markets and sells innovative medtech products for the global market. The Company is committed to improving patient welfare and patient outcomes, improving clinical data accuracy and promoting positive health economics.
The Company seeks to drive growth by leveraging its expertise in sales and commercialization of its broad portfolio of medical technology products, mainly in urine measurement, ultrasound, anesthesiology/ICUs, surgery and wound care, in combination with targeted M&A.
The Company is headquartered in Oslo, Norway, with additional offices in Narvik, Norway and Gothenburg, Sweden, and subsidiaries in Finland and the US. In addition, Observe Medical has a direct sale organization in the Nordics and a distributor network internationally.
Further information is available at www.observemedical.com.