ASX RELEASE Date: 23rd June 2017 Cryosite to license the future collection, processing and storage of umbilical cord and tissue and to sell certain assets of its Cord Blood and Tissue Banking Business to Cell Care.

Cryosite Limited (ASX: CTE) announces that it has decided to cease the marketing, selling, collection and processing of Cord Blood and Tissue. Consequently, the company has entered into a binding agreement, subject to shareholder approval, to license, under the Cryosite brand, the collection, processing and storage of umbilical cord blood and tissue and to sell certain of its Cord Blood and Tissue Banking assets to Cell Care Australia Pty Ltd.

There will be no change to Cryosite's commitment to long term secure storage for its existing Cord Blood and

Tissue Banking customers.

The purchase consideration for the assets comprises:

  • Cash consideration of $500,000

  • Earn-out payments over a period of five years with a minimum fixed and guaranteed payment of

    $500,000 per annum. Additional earn out payments will be conditional on the achievement of certain performance targets.

  • The surrender by way of a selective buyback, and thereafter cancellation of the 9.23m shares (19.7% of Cryosite's register) which Cell Care holds in Cryosite.

The sale is conditional on Cryosite shareholder approval. A shareholder vote is expected to take place in September 2017.

Cryosite Chairman Mr Stephen Roberts commented:

"Although Cryosite has a long involvement with Cord Blood and Tissue Banking, the demand for Cryosite's collection and processing services has declined and this segment of our business has experienced downward pressure on profitability"

"This transaction delivers attractive financial returns to Cryosite shareholders for exiting the challenging aspects of the Cord Blood and Tissue business while retaining exposure to valuable future cash flows from royalties and earn-out payments."

"Moreover the transaction will support the deployment of additional capital into our higher margin Clinical Trials Logistics and Biorepository services which have established themselves over many years as high quality, customised and cost effective providers for clients. We see significant opportunities to build on Cryosite's expertise in long term cold, frozen and cryogenic storage, logistics and distribution through acquisitions and organic growth initiatives."

On behalf of the Board

Stephen Roberts Chair - Cryosite Ltd

Cryosite Limited published this content on 23 June 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 23 June 2017 05:54:06 UTC.

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