AorTech’s £2.45m mainly stock, and cash acquisition of RUA Medical Devices Limited was approved by shareholders at the EGM on March 31. The transaction brings ‘in house’ AorTech’s partner in the development of its vascular products. The acquisition of RUA Medical also brings increased revenues for the combined company (which we now estimate at £2.2m for FY 2021) plus an enlarged management team with extensive medical device experience.
We have taken the opportunity to run sensitivity analyses on the key valuation variables (which are predominantly the exit valuations of the vascular and heart valve products on acquisition). That suggests the stock-market is assigning very low probabilities of success for both products and/or extended timelines for their acquisition or licensing.
Our fair value for the combined entity is unchanged at £101.2m or 689 pence per share, despite the recent market turmoil.
