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Ebos wipes debt by selling science businesses

Thursday 5th August 2010

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Ebos Group is selling its trans-Tasman science businesses, allowing the medical products supplier to erase its debt. Shares of Ebos rose to a three-month high.  

The Christchurch-based company sold its Global Science and Technology, Quantum Scientific and Crown Scientific units to Pennsylvania-based lab supply and distribution company VWR International.

The deal will leave Ebos “essentially debt free,” the company said.

As at December 31, the company had some $70 million in bank debt, according to its first half report.  

“The transaction will be value-positive for Ebos shareholders both in terms of a gain on sale from the transaction and the resultant cash flow,” the company said in a statement.

“Ebos intends to utilise its full financial resources to focus on and grow in the healthcare market exclusively.” 

The shares rose 1.1% to $6.50 in trading today, and have outperformed the NZX 50 this year, gaining 10% compared to the index’s 5.6% decline. As at December 31, the scientific businesses’ assets were worth $40.8 million.

The units made up 4% of Ebos’ first-half revenue at $30.3 million, though the $2.5 million underlying earnings made up 11% of EBITDA.

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