ImmunoPrecise Antibodies Ltd. signed a binding letter of intent to buy all the issued and outstanding shares of German contract research company Preclinics GmbH for €2.3 million.
Under the proposed deal, ImmunoPrecise would pay 35% of the deal value for the privately held company in cash and the remaining in form of ImmunoPrecise company shares on closing of the transaction.
The company will pay an additional €750,000 in succession payments over three years based on continued profitability, with an option for Preclinics' shareholders to take the payments in cash or equity.
In addition, the deal requires ImmunoPrecise to fund Preclinics after the completion of the transaction and to enter into a separate agreement with Preclinics shareholders on the development and commercialization of Immunojunction.
The CEO and CFO of Preclinics will also enter into a three-year management contract, which will include nonsolicitation and noncompetition clauses.
The parties will carry out due diligence until Feb. 28, 2018, after which they may enter into a definitive agreement regarding the transaction.