Alltracel to pay €8m for dental care group

ALLTRACEL pharmaceuticals has announced plans to splash out up to €8 million for a London-based specialist dental care company.

The fledgling first aid product developer, headquartered in Dublin’s Sallynoggin and quoted on London’s Alternative Investment Market, said it had agreed the takeover of Westone Products, a manufacturer of breath freshener, toothbrushes, mouthwash and dental floss.

It will pay €5.8m in a mixture of cash and Alltracel shares when the deal is signed.

But it will pay a further €2m in stages over the next two years if Westone meets performance targets.

Westone is privately-owned and recorded pre-tax earnings before tax, interest and depreciation of €1.2m in the year to September.

It generated sales of €11.5m over the same period, an 8% increase on 2003. It provides dental hygiene products to both branded and supermarket own-label sectors in Europe, America and Asia.

Alltracel’s main motivation for buying the company stems from Westone’s knowledge of thin film technology, such as breath freshening strips that dissolve on contact with the tongue.

The company also has access to a manufacturing and packaging base in China through a 50%-owned joint venture. Trading in Alltracel shares was suspended on the news, to allow the company to prepare a document for the stock exchange outlining the enlarged group’s finances and future strategy.

Alltracel said it would publish this document before the end of the month and hold an extraordinary general meeting in January to approve the takeover and the issue of fresh shares on the market.

Alltracel chief executive Tony Richardson said the deal would give the company a solid platform to expand its m-doc brand, which uses technology developed in-house to bring to market first aid products that stop bleeding more quickly than conventional wound dressings.

“In the short term, we expect to initiate a stops-bleeding product development programme for the dental and oral care sector,” he said.

This would extend Alltracel’s product range beyond plasters, sprays and dressings to stop nosebleeds to include products that could be used by dentists to stop bleeding after extracting teeth.

Westone’s existing management will be retained, but Alltracel chief operating officer Donal O’Brien will take overall charge of integrating the new division and its Chinese plant.

Chief operating officer Mike Levinstein said the two firms fitted well together. “We share many customers and have complementary geographic footprints,” he said.