Revolymer sais it has executed agreements committing it to divest its nicotine gum business to the Danish company Alkalon A/S, with completion subject only to the satisfaction of certain customary conditions precedent including the transfer of key customer contracts and the Canadian product licence to Alkalon.
Alkalon has EU regulatory approval for its products and an established European customer base, which complements Revolymer's Canadian customer base.
The business combination offers the potential to grow the combined business in its existing territories as well as to expand in additional territories, benefiting from economies of scale in manufacturing and marketing.
At completion, the consideration to Revolymer for the divestment of this business will be a 15% equity holding in the combined new business, which may increase to 20% if certain commercial milestones in the acquired Revolymer nicotine gum business are met in within nine months of completion, namely the award of additional specific contracts in Canada.
The consideration is valued at DKK8.2m, equivalent to £0.9m, and Revolymer currently expects to hold the investment in Alkalon for the medium to long term. At completion, Revolymer will have the right to appoint a director to the board of the combined business, that will continue under the Alkalon name.