Rockeby closes on deal in Beijing Nick EvansTuesday, 27 March...

Rockeby closes on deal in Beijing

Nick Evans
Tuesday, 27 March 2007

AUSTRALIAN-listed diagnostics group Rockeby biomed has announced it is in the final stages of completing its due diligence in relation to taking a 40% stake in Beijing Anheal Laboratories, a Chinese Government-linked company. The deal, if successful, will give Rockeby a conduit for the sale of its avian influenza virus rapid diagnostic test into the Chinese market.



Rockeby chief executive Dr Sze-Wee Tan said the deal is potentially very significant for the company.

"With a 4.6 billion poultry population, China is the largest poultry market in the world. There is currently a national vaccination program for poultry, but there is a need for post-vaccination surveillance testing for the monitoring of virus mutations, and Rockeby's avian flu test will be playing this role," Tan said.

"When the test is registered and approved for use by the Ministry of Agriculture, Rockeby will have a three-year monopoly before the next product can enter the market in China. The potential of this testing market will be financially significant to Rockeby."

Anheal is linked to the Chinese Ministry of Agriculture, but is a profit centre by itself, generating estimated revenues of $US6.33 million ($A7.88 million) and after-tax profits of $US1.26 million in the 2006 financial year.

Rockeby and Anheal are now reviewing the sales and purchase agreement and have initiated the process to obtain the relevant approvals from the Chinese authorities.

Tan said he was pleased with the progress of the deal to date.

"We are very pleased with the conduct of the due diligence and conclusions of our professional advisers. We expect that the regulatory and approval process by the Chinese Government will be smooth to enable us to finalise this deal during the final quarter of the 2007 financial year," said Tan.

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