FTSE 250 biotech company BTG is to be sold to U.S. life sciences giant Boston Scientific after an offer of 815p was accepted. The deal still has to be officially ratified by shareholders but reports say that BTG’s 3 largest investors have already approved the offer. The sale marks an impressive turnaround under chief executive Dame Louise Makin over her 14 years at the helm.
BTG has a particularly interesting history stretching all the way back to 1948, though the ‘company’ was officially founded in 1991. 70 years ago, the UK government founded the National Research Development Corporation with the state-owned company tasked with the commercialisation of research funded from the public purse. In 1975 the National Enterprise Board was established with the purpose of facilitating the privatisation of parts of public sector industry, in line with the policy of the then labour government under the leadership of Harold Wilson. This was a more (ironically) conservative precursor to Margaret Thatcher’s larger scale privatisation of state-owned utilities monopolies.
In 1981 the two bodies were merged in the British Technology Group, which became a company in 1991 before a 1992 management buy-out took BTG into private ownership. A stock market listing followed in 1995. BTG’s most valuable asset over the years has been the commercial rights to magnetic resonance imaging (MRI), acquired in 1983. The company still licenses a significant part of the global MRI rights and counts General Electric and Philips as its licensees.
However, until Dame Makin took over as the chief executive in 2004, BTG was more of a holding for an assortment of intellectual properties than a company run along the kind of commercial principles commonly associated with a stock market listed enterprise. Over her tenure it became a ‘darling of the FTSE 250’ and focused on biotech research and development. Its specialises in treatments for vascular diseases and cancer and is arguably best known for its snake bite antidote CroFab.
The deal announced last week offered a 37% premium to BTG’s share price of 615p, where it closed the day before the news broke. Woodford Investment Management, one of BTG’s three largest shareholders, was quick to agree, with the fund’s recent poor performance meaning it is having to divest assets to cover investor redemption request. Invesco, another asset manager and Novo Nordisk Foundation, a Danish foundation that specialises in medical research are the other two of the three biggest investors who have rubberstamped their approval for the sale. Their combined holdings amount to circa. 40% of the company’s total market capitalisation, which means securing a majority vote from shareholders is now practically a formality.
Boston Scientific’s current business is centred upon oncology delivery technologies and the BTG acquisition will add many of the therapies these technologies deliver to cancer patients. BTG currently employs 1600 across its three major cancer, vascular disease and snake bite/drug overdose treatments units. The buyer expects BTG’s therapies to add $400 million in annual revenue with another $175 million resulting from synergies achieved through combining the two businesses.