Micap plc (“Micap” or “the Company”)

Acquisition of Rendel & Scherer GbR (“R&S”) for up to €1.0 million


Micap plc, the UK microencapsulation specialist, announces the acquisition of Rendel & Scherer GbR, a company with a strong reputation as a provider of innovative microencapsulation solutions, originally to the food industry, and more recently, a growing expertise within the Nutriceutical and Cosmeceutical markets. The acquisition is expected to make a positive contribution to Group profitability in its first year.

Michael Brennand, CEO of Micap, commented: “This is a very exciting acquisition, which will bring new skills and intellectual property into the Group across a wide range of microencapsulation technologies, and will help in establishing Micap as the clear industry leader for industrial companies facing microencapsulation challenges. We shall look to both R&S and Applied Analysis to assist in our drive to commercialisation in the natural healthcare market, where the opportunities for new product developments utilising microencapsulation are significant”.

Based in Bremerhaven , Germany , and founded in 2002, R&S is currently working on a number of revenue generating projects, including long term royalty and contractual arrangements with, inter alia, a leading German flavour house and a supplier of yeast/cultures to the bakery and wine industry. R&S has also recently supplied essential oils encapsulated in a novel delivery system to a cosmetics partner, for use in a newly launched product. In addition R&S is a partner in a European Network project called Flow-cap, where it is part of a consortium of organisations developing a system to protect live probiotic bacteria during processing. This system has applications in both the cheese and candy industries.

The acquisition by Micap of the entire issued and potentially issuable share capital of R&S , is for an initial consideration of € 0.25 million, with a further € 0.75 million of deferred consideration subject to performance (see footnote). The consideration is payable in a mixture of cash and ordinary shares in Micap plc. A new company, Micap GmbH, has been created to acquire the business of R&S, which is an established partnership between Mr Jorg Rendel and Mr Carlo Scherer, who will both remain as directors of Micap GmbH.

Jorg Rendel, Director of R&S added: “Carlo and I are delighted to be joining the Micap group, and we look forward to the opportunity of utilising Micap’s exciting technologies and bringing our know-how, experience and skills in microencapsulation solutions to a wide range of new challenges”.

Footnote

The deferred consideration of up to € 750,000 is payable to the Vendors (Messrs. Rendel and Scherer) subject to achievement of turnover targets as follows:

In assessing the number of shares in the Company to be issued to the Vendors pursuant to the deferred consideration referred to above, the value attributed to each share shall be the average of the middle market quotations of shares in the Company as derived from the AIM market daily list for the thirty days prior to the date on which the payments become due.

The company can, at its sole discretion, opt to pay the share element of the deferred consideration in cash.  

Notes to editors:

About Micap

Micap listed on AIM in August 2003 and is a UK technology licensing company specialising in the microencapsulation of active ingredients within yeast cells. For further details visit www.micap.co.uk

Microencapsulation is a process whereby tiny droplets of liquid or particles of solid material are coated with a continuous film of polymeric material. Microcapsules have several benefits, including conversion of liquids to solids; separating reactive compounds; protecting substances against environmental factors; and improving the material handling properties. Micap's unique proprietary technology involves using killed yeast cells as natural capsules to protect the active ingredient. Yeast encapsulation can protect active ingredients against high temperatures, the effects of the sun, pressure and degradation through exposure to the air. The natural affinity of yeast cells for mucous membranes can also be exploited for targeted drug delivery.