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EKF Diagnostics Agrees to Sell Selah Genomics Subsidiary

NEW YORK (GenomeWeb) – Less than two years after it acquired US-based molecular diagnostics developer Selah Genomics, UK-based diagnostics firm EKF Diagnostics announced today that it is selling the subsidiary back to Cofounders Michael Bolick and Jeremy Stuart for a "nominal" sum.

EKF purchased Selah in March 2014 for an initial consideration of $35.6 million through the issue of new EKF shares and an additional deferred consideration of $35 million, valuing the company at $70.6 million.

Selah reported a loss after tax of £600,000 ($892,000) from March 2014 to December 2014, and a loss after tax of £2.6 million ($3.9 million) from January 2015 to the end of the November, EKF said in a statement. The company's balance sheet valued Selah at £41.4 million ($61.5 million) at the end of 2014 — and EKF will write off that amount, the company added. Its board estimates EKF will save about £2 million ($2.9 million) annually by divesting Selah.

If Selah is able to secure further equity funding within the next 12 months, EKF will receive a 10 percent equity share in its former subsidiary. And if Selah is sold, EKF will receive 10 percent of the net proceeds.

In April, EKF announced its board had initiated a strategic review of the business at the suggestion of its shareholders to explore ways to maximize shareholder value. At the time, a company spokesperson told GenomeWeb that EKF was looking at all its options, including the possible spinoff of its molecular diagnostics business.

"Today’s sale of Selah, with the associated cost savings, is another step towards re-establishing EKF as a profitable, cash-generating point-of-care diagnostics business," said company Chairman Ron Zwanziger in a statement.