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Hamilton Thorne acquires Embryotech Laboratories

Hamilton Thorne announced that it completed the acquisition of 100% of the operating assets of Massachusetts-based Embryotech Laboratories, Inc. for total consideration of approximately $7.25m.

Hamilton Thorne estimates this transaction will be accretive to earnings in 2016 and is expected to add over US$5m of revenue and more than US$1.5m to EBITDA in calendar year 2017.

Significantly accretive to revenue, EBITDA, and net income

Diversifies and increases recurring revenue to an estimated 40% of sales

Expected to increase 2017 revenue by over 50% (vs. last 12 months actuals)

Expected to increase 2017 EBITDA by over 100% (vs. last 12 months actuals)

Establishes Hamilton Thorne as a leader in providing quality control products and services

Opportunity to expand product offering in international markets

Minimal dilution by using cash on hand and new 5-year term debt at 4.25% interest

Sets the stage for additional acquisition opportunities

"Embryotech is the acknowledged US leader in providing quality control services and testing assays to the ART community. In addition to acquiring a great brand, we will be strengthening the financial performance of Hamilton Thorne.

“Not only will this acquisition increase our scale, we anticipate that it will diversify our revenue base from a predominantly one-time sale of instruments model to a projected 40% recurring revenues from the sales of services and consumables," said David Wolf, President and Chief Executive Officer of Hamilton Thorne.

"Combining Embryotech with Hamilton Thorne's portfolio of products and services provides Embryotech with increased financial strength, marketing expertise, and access to the international markets served by Hamilton Thorne.

“This relationship will bring greater resources to support our current operations and growth plans as well as provide greater opportunities to our employees," said Eric Dorman, Embryotech's President. Mr. Dorman will continue to lead Embryotech Laboratories as its President.

Pursuant to the transaction, Hamilton Thorne paid US$6.075 million in cash and issued 7,759,154 common shares of Hamilton Thorne at a deemed issuance price of Cdn$0.198 per share.

The aggregate share component of US$1.175 million was calculated based on a twenty-day weighted-average stock price prior to agreement date and the average US to Canada foreign exchange rate for the prior five days.

The share consideration will be placed in escrow pending final calculation of certain closing adjustments and to satisfy any possible indemnity claims.