By Anthony O. Goriainoff
Omega Diagnostics Group PLC said Friday that it has conditionally agreed to sell its diagnostic test-kit manufacturing business and facility in Scotland to Accubio Ltd. for one million pounds ($1.4 million) in cash.
The London-listed medical-diagnostics company said the sale to Accubio–a subsidiary of Zhejiang Orient Gene Biotech Co.–was part of its strategy to increase revenue and reduce losses.
The company said in November that its contract with the U.K. Department of Health and Social Care expired, and that it wasn’t provided with a license to manufacture Covid-19 tests. Therefore, the second phase of its contract wasn’t activated and no orders were placed, it said.
Omega Diagnostics said that as a result of this it was left with insufficient demand for production volume as well as an unsustainable manufacturing cost base in the Scottish facility. The company said that the Alva site generated a GBP4.9 million loss in the nine months to Dec. 31, and that its sale was part of the aforementioned strategy.
The company said the sale will allow the site to continue to thrive and will provide job security for its 109 employees who will be transferring to Accubio.
“The sale will significantly reduce the group’s fixed cost base and eliminate a number of potential future liabilities, whilst generating funds for further investment and growth,” Chief Executive Jag Grewal said.
Write to Anthony O. Goriainoff at [email protected]