Cronin gobbles up OpenIOLabs in all-share deal

Chemistry digitising company Cronin Group announced the acquisition of OpenIOLabs on Friday, which it described as a specialist in the development of hardware and software for scientific and industrial uses.

The AIM-traded firm said the acquisition was for a maximum consideration of 47 million new ordinary shares, of which 25 million consideration shares will be issued on completion, with the balance being issued within four years of completion.

It said the deferred shares would be issued if at any time before the fourth anniversary of completion, the middle market quotation for the company's ordinary shares on AIM was at a price equal to or above 5p for a continuous period of 60 business days; or the whole of the ordinary share capital of the company is acquired on arm's length terms by a third party purchaser at a price equal to or above 5p per share.

The issue of the deferred shares was also under the proviso that David Cleevely would not voluntarily resign from, or not otherwise leave the board of Cronin Group within 24 months following completion.

Each of the vendors of OpenIOLabs had undertaken not to dispose of any interests in their respective consideration shares for a period of 12 months following completion, Cronin confirmed, or for a period of 12 months following the issue of the deferred consideration shares in the case of those, other than in “certain limited circumstances”.

“OpenIOLabs, which is based in Cambridge, provides an open source hardware translation platform for organisations working with multiple pieces of equipment in a laboratory or in an industrial environment,” the Cronin board explained in its statement.

“It bridges the language and compatibility gap between various hardware and software, bringing different systems together to create one point of control.

“The acquisition is expected to accelerate the company's development by a minimum of six months.”

In the year to 31 December 2016, OpenIOLabs reported audited revenue of £77,694 and a loss after tax of £601,283.

As at that same date, it had net assets of £207,344.

Cronin also said that as part of the acquisition, Dr David Cleevely, the chairman of OpenIOLabs, would be appointed as a non-executive director of Cronin with effect from the date of completion.

It said Dr Cleevely is a “serial entrepreneur”, having founded or co-founded several companies and organisations including Abcam, Analysys, 3 WayNetworks, Cambridge Wireless, Cambridge Angels and Controllis.

He is chairman of the Raspberry Pi Foundation, and is a member of the IET Communications Policy Panel.

Dr Cleevely was awarded a CBE for services to innovation and technology in 2013.

“This acquisition brings together complementary skills and technologies to strengthen Cronin's technical implementation of our strategic roadmap to digitize chemistry,” said Cronin Group executive chairman Mark Warne.

“We are confident that the combined business will deliver an enhanced customer proposition in the fast-growing Smartlabs market and deliver good value for our shareholders.

“I am delighted that David Cleevely has agreed to join our board, bringing a wealth of relevant experience as we enter an exciting growth stage.”