Alltracel receives approach from US firm

Dublin-based Alltracel, the listed wound care and oral healthcare group, is believed to have received an approach from HemCon Medical Technologies, which provides bandages to US soldiers in Iraq and Afghanistan.

In a statement to the stock market yesterday, Alltracel said it had received "a very preliminary approach" from a third party that "may or may not lead to an offer being made" for the company.

"It should be emphasised that discussions are at a very early stage and that there is no certainty that they will lead to an offer," the company added.

Informed sources said HemCon, which is based in Portland, Oregon, had made the approach.

The two groups already work together, having signed an exclusive technology and product development agreement in January 2007 for a range of wound-care technologies and products for use in the military market.

HemCon was founded in 2001 with funding from the US army, and is believed to be keen to expand its operations internationally.

Alltracel's share price, which is listed on the Alternative Investment Market in London, rose by 11 per cent to £10.25 following the announcement. It has a market capitalisation of £13.2 million (€17.76 million).

No one was available for comment from either Alltracel or HemCon.

Alltracel was reported at the weekend to be the subject of a bid by the company's management team, which is led by Tony Richardson. This is not believed to be the case.

HemCon is one of the fastest-growing privately owned companies in the US. It makes bandages, the crucial element of which is found in the shells of shrimp. These bandages are standard issue for all US military in Iraq and Afghanistan.

The US company had annual revenues of $24 million (€16.61 million) in 2006 and was expected to grow this to $40 million in 2007. It employs about 100 staff and has achieved a growth rate of more than 1,000 per cent over the past three years.

Alltracel also released a trading update yesterday, saying it had made "solid progress" in 2007 and was "well positioned" for further growth in 2008.

"We are particularly pleased with the acquisition of Synpart, a specialist oral care and sports bandage supplier," it said. "The integration of Synpart has progressed very well during 2007 and we expect the acquisition to significantly drive our revenue growth in 2008."

Alltracel was founded by Gerard Brandon, a former plumber, in 1996. It has operations in London, Germany, the Czech Republic and China. The board is chaired by Padraic O'Connor, a former managing director of NCB Stockbrokers.