Boston, MA – Capstone Partners LLC, a leading national investment banking advisory firm, announced that it has advised Interleukin Genetics, Inc. (AMEX: ILI) on its recent acquisition of the assets and business of Alan James Group, LLC, a privately-held, healthcare-focused consumer products company. Capstone Partners served as the exclusive financial advisor to Interleukin on this transaction.
Under the terms of the purchase agreement, Interleukin made an upfront payment to Alan James of $7 million in cash and $0.5 million in newly issued stock, based on the volume-weighted average closing stock price for the 20 consecutive trading days ending August 15, 2006 of $5.68 per share. In addition, if certain earnings milestones are achieved by the Alan James subsidiary from 2007 through 2009, up to $1.5 million in cash and up to approximately 1.6 million shares of stock representing a value of $9.25 million based on the same volume-weighted average price of $5.68 per share will be paid as additional consideration.
The combination of the two companies will create a diversified, fully integrated provider of products and services in the consumer and professional healthcare marketplace. Interleukin and Alan James have complementary capabilities in genetic testing services and preventive healthcare products distribution. By combining these capabilities, the company will be well positioned to expand its science-based solutions portfolio, rapidly commercialize its products and services and offer a broad selection of innovative, preventive, and personalized therapeutics to its customers.
"This acquisition provides Interleukin with new products and sales and marketing leadership in the rapidly expanding consumer health segment," said Dr. Kenneth Kornman, president and chief scientific officer of Interleukin Genetics. "Alan James has a strong track record of innovation and marketing in the area of preventive therapeutics. With Alan James' experienced product commercialization team and the strong financial support provided by Alticor, Interleukin is well positioned to effectively commercialize our science-based products and services. By creating a diversified, fully integrated provider of products and genetics tests, we believe this combination will create significant business growth opportunities to the benefit of our shareholders, customers, employees and partners."
"The combination of Interleukin and Alan James will create an innovative company with leading genetics research that is able to deliver science-based products and services in a rapidly expanding marketplace," said Tim Richerson, the new chief executive officer of Interleukin Genetics. "The complementary combination of Alan James' existing brands, product pipeline and channel development capabilities with Interleukin's genetics expertise and scientific capabilities positions the company to realize its vision to be a leading genetics-focused, personalized health company. We anticipate integrating our companies to realize the strategic, scientific and financial benefits of this transaction quickly and efficiently."
Alan James has commercialized products that include recognizable consumer brands such as Ginkoba(TM), Ginsana(TM), and Venastat(TM), and Interleukin currently markets genetic tests for cardiovascular disease risk assessment and general nutrition assessment, both sold under the Gensona(TM) brand through Alticor's Quixtar division, and PST® periodontal disease risk assessment.
Interleukin will continue to distribute products and services through Alticor's direct sales channels. The company anticipates new opportunities to enhance this channel in connection with the transaction. Alan James will continue to do business under the name Alan James Group as a wholly owned subsidiary of Interleukin Genetics, Inc.
The combination is expected to allow the company to accelerate its development of a predictive and preventive product portfolio, expand its presence in the personalized health and wellness marketplace, and broaden its revenue base to include consumer, commercial and professional healthcare channels. This strategic combination presents Interleukin with a unique opportunity to take advantage of the fast-growing $40 billion OTC and Nutraceuticals markets in the U.S., and the rapidly emerging molecular diagnostics marketplace, currently representing over $2 billion in the U.S. and growing at 15 to 20% per year.
Interleukin Genetics, based in Waltham, MA, is a biotechnology company focused on developing and commercializing personalized health products. The company uses its proprietary technology to help in the development of risk assessment tests, pharmacogenetic tests, nutritional and therapeutic products based on the genetic variations in people. Interleukin Genetics has commercialized genetic tests for periodontal disease risk assessment, cardiovascular risk assessment and general nutrition assessment, and its current development programs focus on osteoporosis and weight management. Interleukin expects that these programs will also lead to products that will personalize the selection of nutritional and therapeutic products and enable the managed care industry to improve patient care and better allocate resources.
Alan James Group, LLC., based in Boca Raton, FL, is a privately held consumer products company that develops Nutraceuticals and OTCeutical brands. The company's portfolio includes recognizable consumer brands such as Ginkoba(TM), Ginsana(TM), and Venastat(TM), and products within the Health and Beauty Care category such as vitamins, minerals, herbs and supplements. The company's products are sold at the nation's largest retailers, including Wal-Mart, Target, CVS, Walgreens, Rite-Aid, Kroger and Albertson's.