London-listed Source BioScience, which operates a DNA sequencing facility in Tramore, Co Waterford, is to acquire the Scottish based company Select Pharma Laboratories for £7.3 million (€10.2m).

The acquisition is being part funded by the issue of 31,383,749 new ordinary shares, representing approximately 10 per cent of the current issued share capital, at anundiscounted placing price of 14p per share. Up to £0.6 million of the purchase price is to be deferred for two years, Source said.

The company has conditionally raised approximately £4.4 million in gross proceeds from existing and new investors, via a share placing, in addition to securing £3.5 million of new debt to finance the initial consideration of £6.7 million and the expenses of the transaction.

Select is a privately-owned firm that provides pharmaceutical testing - including physical and chemical testing - and microbiological analyses for applications in therapeutics and healthcare products.

"The proposed acquisition of Select will provide the company with the expertise and capability to provide stability testing services that are highly complementary with the group's existing stability storage services, said Source BioScience chief executive Dr Nick Ash.

“The Select team will bring significant experience and knowledge which will enable the Group to meet increasing demand for stability and pharmaceutical batch release testing services, from a broad spectrum of customers and from territories that Source BioScience does not currently address,” he added.

Source BioScience is a provider of laboratory services and products to the healthcare and clinical, life and applied sciences and biopharma industries. It has facilities in five regions, including Ireland, and customers in over 90 countries.

The company announced a profit before tax of £1.4 million last year with revenues up 29 per cent to £25.2 million.