A Canadian healthcare acquisition company is continuing to build its portfolio of healthcare technology companies. Principal Technologies Inc. announced on December 11, 2024, that it signed a non-binding letter of intent to acquire a 70.7% controlling interest in Syndermix AG, a Swiss medical research company, in a transaction valued at $44 million.
Key Points
- The acquisition includes three proprietary medical technologies: BioEleSonic (a device for nasal congestion relief), Noxogen Therapeutics (nitric oxide-based treatments), and TheraLect (lectin-based therapeutics).
- These technologies are said to be at various stages of development and commercialization. The acquisition announcement claimed that TheraLect has positive Phase IIa results resulting in epithelial healing.
- The transaction remains subject to due diligence, definitive agreements, and regulatory approvals from the TSX Venture Exchange. Principal estimates the three medical assets have a current risked present value exceeding $58 million. At closing, Syndermix will have no other debt and a working capital of nil.
This potential acquisition reflects Principal Technologies’ strategy of acquiring cost-efficient, optimized healthcare technologies that can be distributed globally, with management suggesting one of the three assets may be ready for commercialization within a few years.
The Data
- Transaction value: $44 million for 70.7% equity interest plus all loans to Syndermix.
- Payment structure: $18 million in shares (36 million shares at $0.50 each) plus $15.3 million in new loans, plus $10.7 million purchase of existing loan receivable.
- Loan terms: 5% annual interest, four-year maturity, with accrued interest deferred until maturity and payment limited to Syndermix’s net cash flow from operations.
- ESGTI AG, a diversified investment conglomerate that has funded Syndermix for four years, will become Principal’s major shareholder with approximately 44% ownership and a new Control Person of the Company.
- Separately, Principal reported delays in closing its previously announced acquisition of Vivostat A/S, pending receipt of nine million euros in funding.
Industry Context
The purchase of Syndermix is a transformational opportunity for Principal. Syndermix has developed three proprietary medical assets with a current estimated risked present value in excess of $58 million.
Jerry Trent, CEO of Principal Technologies
According to the recent announcement, Syndermix’s three technologies address different medical needs. BioEleSonic targets nasal congestion through what is described as a globally patented and design-protected connected treatment device which is the first drug-free, non-invasive solution providing targeted, rapid relief. Noxogen Therapeutics focuses on innovating ways to harness the therapeutic properties of nitric oxide (NO) for the non-invasive, topical treatment of systemic and dermatological conditions and their symptoms. TheraLect leverages the antimicrobial properties and healing activities of lectins (proteins) found in plants to manage symptoms and treat human disease. The company’s proprietary technology platform, rooted in cutting-edge DNA technology, is a novel recombinant plant lectin with positive Phase IIa results in epithelial healing, though specific details were not provided.
The potential acquisition positions Principal Technologies to expand its ownership of innovative and varied medical technology assets. The company indicated it continues to evaluate opportunities in medical technology and pharmaceutical areas while working to close both the Syndermix and previously announced Vivostat acquisitions.
