Mr. David Wolf reports

HAMILTON THORNE ANNOUNCES THE ACQUISITION OF GYNETICS MEDICAL PRODUCTS N.V.

Hamilton Thorne Ltd. has completed the acquisition of Gynetics Medical Products NV and Gynetics Services BV (collectively, Gynetics).

Gynetics, based in Lommel, Belgium, is a leading manufacturer of a wide range of innovative, high-quality in vitro fertilization (IVF) devices in the global IVF market. The transaction reinforces Hamilton Thorne's consumables product offerings and provides the company with additional profitable operations in the well-established European ART market. For the trailing 12 months (TTM) ending May 31, 2023, Gynetics had revenues of approximately 4.6 million euros ($4.9-million (U.S.)) and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of approximately 2.3 million euros ($2.5-million (U.S.)). During this period, approximately 20 per cent of Gynetics sales were made to Hamilton Thorne.

Key benefits of the transaction:

• Addition of a profitable portfolio of premium consumables with recurring revenue that is highly complementary to Hamilton Thorne's existing product offerings;
• Diversifies and increases product offerings through the addition of own-branded embryo transfer catheters and ovum pickup needles that are used in the IVF clinic procedure room, as well as the laboratory;
• Opportunity to expand Gynetics product offerings into additional international markets and increase direct sales through existing Hamilton Thorne sales channels;
• Financed through an expansion of existing credit facility, cash on hand and share consideration to the seller;
• Expected to be immediately accretive to revenue and adjusted EBITDA.

"We are excited to welcome Gynetics to the Hamilton Thorne family. This acquisition enhances our presence in the very attractive European ART market, further diversifies our revenue base and increases our percentage of recurring revenues through the sale of additional consumable products, including Gynetics's ovum pick up needles and embryo transfer catheters," said David Wolf, president and chief executive officer of Hamilton Thorne. "Gynetics is a well-established and respected provider of premium clinical and laboratory consumables in the European ART market that shares our total commitment to the highest standards in customer service and quality. From our existing business relationships, the Gynetics staff is well known to us. I am particularly pleased that all Gynetics's employees will join our team and help drive the growth of the existing Gynetics business."

Acquisition details

Pursuant to the transaction, Hamilton Thorne indirectly acquired 100 per cent of capital stock of Gynetics based on an enterprise value of approximately 18.3 million euros ($19.4-million (U.S.)) or approximately eight times Gynetics's trailing 12 months adjusted EBITDA ending May 31, 2023. The nominal purchase price, paid at closing, of approximately 18.7 million euros (approximately $19.8-million (U.S.)) takes into account certain working capital and other adjustments.

On closing, Hamilton Thorne paid consideration of approximately 14 million euros ($14.8-million (U.S.)) in cash, plus the issuance of an aggregate of 5,007,117 common shares of Hamilton Thorne stock at a deemed issuance price of $1.335 per share, with a deemed aggregate value of approximately 4.7 million euros (approximately $4.9-million (U.S.)). The cash component of this transaction was financed with a drawdown of $8-million (U.S.) from its acquisition line of credit facility with its existing senior lender and cash on hand. The line of credit converts postclosing to a secured five-year term loan which bears interest at a fixed rate of approximately 8 per cent per annum, and amortizes over the life of the loan.

The consideration shares will be subject to a five-year escrow pending final calculation of any closing adjustments and to satisfy any possible indemnity claims.

Francesco Fragasso, chief financial officer of Hamilton Thorne, commented: "Our overall liquidity continues to be very strong, with over $8.8-million (U.S.) cash on hand and approximately a 1.7 postclosing leverage ratio (TTM EBITDA to senior debt) on a pro forma basis. Given this cash on hand, the cash flow generated by our business and our borrowing capability, we have enough dry powder to continue our aggressive acquisition program."

The transaction is subject to receipt of final acceptance from the Toronto Stock Exchange in accordance with its policies.

About Hamilton Thorne Ltd.

Hamilton Thorne is a leading global provider of precision instruments, consumables, software and services that reduce cost, increase productivity, improve results and enable breakthroughs in assisted reproductive technologies, research and cell biology markets. Hamilton Thorne markets its products and services under the Hamilton Thorne, Gynemed, Planer, IVFtech, Embryotech Laboratories, Tek-Event, Microptic and Gynetics brands, through its growing sales force and distributors worldwide. Hamilton Thorne's customer base consists of fertility clinics, university research centres, animal breeding facilities, pharmaceutical companies, biotechnology companies, and other commercial and academic research establishments.

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