SYDNEY, AUSTRALIA: Trajan Group Holdings has signed binding share purchase agreement and a real estate purchase agreement to acquire 100% of Chromatography Research Supplies Inc. (CRS), a leading global manufacturer of high-quality analytical consumables based in Kentucky, USA.

Trajan is acquiring CRS for US$43.3 million through a share purchase agreement and a real estate purchase agreement, the latter being for the purchase of the land and building from which CRS operates in Kentucky, USA.

Having operated for over 25 years, Chromatography Research Supplies (CRS) is a leading manufacturer of electronic and manual crimping tools, gas filters, ferrules, and injection port septa.

Its products are used in analytical laboratories and various other industries worldwide and are known for their quality, ease of use and high levels of support.

The acquisition is highly complementary to Trajan’s existing product portfolio in the analytical workflow and consolidates Trajan’s current market leading position in gas chromatography sample introduction, supporting the quality of flow path connection and sealing functions with two leading product lines – septa and ferrules.

Chromatography Research Supplies has been a long-term supplier of consumables to Trajan since Trajan’s acquisition of SGE Analytical in 2013.

In addition, the acquisition extends Trajan’s portfolio via CRS’ other product lines. Such product lines include tools that relate to sealing sample vials which are highly complementary to the Trajan Soltec business acquired in late 2018, and coating technologies that align strongly with Trajan’s automation businesses Axel Semrau and LEAP Pal Parts which were both acquired in late 2021.

CRS has a track record of strong financial performance, with accelerated growth expected in FY22F, adding FY22 forecasted revenue of US$14.1 million (A$20.1 million8) and forecast EBITDA of US$4.2 million (A$6.0 million8)9. The acquisition price of US$43.3 million (A$61.9 million8) implies a ~9.5x EV/FY22F EBITDA10 on a pre synergies basis.

Trajan has identified significant revenue and cost synergies as well as corporate savings realised from the date of acquisition and product line alignment, for total estimated annual synergy benefits of ~A$1.3 million11, expected to ramp up within the first 2–3 years of ownership. Through the consolidation of current manufacturing facilities, Trajan can realise additional synergies over the medium to long term.

Stephen Tomisich, Chief Executive Officer and Managing Director of Trajan said: “The acquisition of CRS enhances multiple areas of our business and builds on our previous successful acquisitions to deliver comprehensive and best in class products in the analytical workflow.”

“Our market leadership in gas chromatography is enhanced with the addition of septa and ferrules components, as well as introducing a broader portfolio of products in other areas of the analytical workflow that build on our automation business.

As with our previous acquisitions, we have partnered with CRS for many years, understand their business, and know precisely where they fit within Trajan. The acquisition is earnings accretive and able to be rapidly integrated. Importantly, our acquisitions are building on capabilities to achieve our vision of personalised, preventative, data-based healthcare.”

Trajan has a proven framework to identify, acquire and integrate complementary businesses into its infrastructure. This framework involves a ‘founder friendly’ approach which is driven by deep industry relationships, targets solutions within the analytical workflow that have the potential to become industry best standard, is complementary to one or multiple business segments, and provides accretive and strategic opportunity to enhance shareholder value.

Utilising this framework Trajan has, over the past 11 years, built a strong track record of delivering acquisitive and organic growth. That process has accelerated since the Company’s IPO in June 2021, having acquired laboratory automation business Axel Semrau GmbH in November 2021, microsampling business Neoteryx LLC in December 2021, and LEAP PAL Parts and Consumables in December 2021, as well as entered a strategic investment in consumer health monitoring with Humankind Ventures Ltd (trading as Forth) in November 2021.

The company will fund the acquisition of CRS via a fully underwritten A$29.7 million Placement to eligible institutional, sophisticated, and professional investors, an acquisition debt facility from HSBC of A$20.0 million and A$13.4 million from existing cash. Completion of Trajan’s acquisition of CRS is conditional on completion of the Placement and on and Trajan satisfying customary conditions to drawdown under the HSBC acquisition financing facility.

The Placement is being issued at an offer price of $2.00 per new share (Offer Price), which represents a 11.1% discount to the last closing price of $2.25 on 16 June 2022.

The Placement will result in the issue of approximately 14.8 million new shares (New Shares), representing approximately 11.0% of Trajan’s existing shares on issue. The New Shares issued under the Placement will rank equally with existing Trajan shares at their date of issue