£20m offer for Alltracel

Dublin-based medical products group Alltracel said yesterday that it has received a cash offer of £20.8 million (€27.61 million) from HemCon Technologies, a privately owned group based in Oregon that provides bandages to US soldiers in Iraq and Afghanistan.

Alltracel's independent directors have recommended the 14p a share offer for the company, which is listed on London's Alternative Investment Market.

Alltracel's share price closed yesterday up 8 per cent at 13.5p. Its market cap is £17.9 million.

The deal will be completed as a scheme of arrangement, which requires High Court approval.

An extraordinary general meeting of Alltracel shareholders is likely to be held in late March.

HemCon's offer has been made through an Irish-registered company called Castlerise Investments.

HemCon, which was founded in 2001 with funding from the US army, approached Alltracel before Christmas.

On January 21st, Alltracel said it had received a "very preliminary approach" but did not identify its suitor.

The following day, The Irish Times revealed exclusively that HemCon had made the offer.

Alltracel has since sought alternative bids from other players but none has been forthcoming.

Founded in 1996 by plumber Gerard Brandon, Alltracel listed in 2001, debuting at 79p.

The company makes a range of oral care and first-aid products.

In the six months to the end of June 2007, it reported an operating profit of €387,000 on revenue of €10.1 million.

Alltracel employs 270 people, with all but 50 employed in manufacturing in China.

Fifteen staff work at its Dublin head office.

All employees are to be retained.

Tony Richardson, Alltracel's chief executive, said current stock market turbulence had played a role in the company's decision to accept the offer.

"The environment is tough for small caps right now," he said.

"It has made it challenging for us in terms of raising money for new acquisitions."

Mr Richardson will head HemCon's European operations.

HemCon has offered Mr Richardson and chief financial officer Nick Hart share options in the US company if certain financial targets are met.