Venn Life Sciences Share Discussion Threads

[rivaldo] 04/10/2016 10:39

It's worth noting that Helium Rising Stars Fund will be heavily co-invested in this. Helium is co-managed by David Newton, who most people should know by now has a formidable track record in small cap investing. If anyone can get the Integumen IPO away, he will.

The main executive director responsible for Integumen wil be Declan Service, who also has a pretty impressive biography:

"Declan has over 25 years’ experience in the global medical device and pharmaceutical arena working in a wide variety of companies and disciplines with 17 of those years spent with Baxter International. Declan has excellent experience working with innovative and dynamic start-ups, guiding them through the often challenging areas of bringing their product to market successfully. Innovenn is a platform to identify, acquire and commercialise breakthrough technologies in the human surface science sector."

[shanklin] 04/10/2016 10:25

LOL, nice to see an optimistic viewpoint Pentangle.

All I had looked at was the maximum downside. As discussed offline with rivaldo, I see this as follows

"worst case, VENN is paying £1.2945m (loan write-off) to get Innovenn off its hands, with the other potential downside being a Euro 1m 5 year bank loan for which VENN is guarantor?"

Hopefully this will not come to pass but at least this downside is something VENN could afford if the whole deal went t%£s up.

[pentangle] 04/10/2016 10:04

I see this as exciting news. Based on the ascribed share price for Innovenn of £4.74m this puts a price of £3.318m on Venn's 70%. Ultimately Venn end up with 30% of the enlarged company which suggests that the new company will have a total value of a little over £11m. I have no doubt that the promotors of the new company will be hoping to float at a higher price than that.

So Venn is left with an investment in Integumen worth £3.3m plus, and a core business forecast to make in excess of 2p EPS this year (look forward to seeing revised forecasts post Innovenn and Brexit). All against a current market cap of £14.6m at an share price of 23.75p (of which Innovenn accounts for 5.4p). As a sum of parts it appears to offer compelling value.

[investordave] 04/10/2016 10:03

One thing that is evident is that the market is not v impressed with the deal. The increase in the share price we have seen today is paltry compared to the recent fall. That said, I intend to hold for another year at least.

[columbarius] 04/10/2016 09:57

Stitch up your words. I'm not suggesting Venn shareholders are disadvantaged if it all goes through, though I do think that 'sale price' is all smoke and mirrors and so doesn't reflect well on the company.

[adamb1978] 04/10/2016 09:50

Columbarius

How is this some stitch-up? VENN shareholders (us) will, after this, own the same number of shares in a more profitable VENN (given that the Innovenn costs will have gone) and a number of shares in a blue-sky growth company.

Adam

[adamb1978] 04/10/2016 09:46

The Big Fella

You will receive a stock which is tradeable as the plan is to list the shares of the new company. VENN shareholders will own 30% of the new company - you can then sell your shares in the newco if you wish.

Adam

[the big fella] 04/10/2016 09:27

I am not overly impressed with the "disposal". If we had got the valuation in cash or part in cash, or stock that was tradable (after a suitable lock-in) I would be far happier.
As it is we still own the vast majority of it. I would be far happier if it was sold off and they can concentrate on growing the business.

[paleje] 04/10/2016 09:08

Well that's turned the tide but management could and should have been a lot clearer in their communications imo.

Yump's right about AIM, its reputation is deservedly so bad it's hardly surprising people are sceptical. Look at another pharma stock QP. this morning, history of misleading statements and over promises admittedly a few heads have already rolled but a 50% drop!!

Not expecting that here but not entirely clear how things are going to pan out either, I reduced last week and not tempted back yet, I might be wrong on that.

[columbarius] 04/10/2016 08:59

I do wonder about the quoted sale valuation. Surely Innoven is a dog otherwise they would retain it or else sell it for cash??? Is this convoluted insider deal a means of passing off Innoven at an inflated price, bundled up with a few add-ons, to mug punters down the line?

[rivaldo] 04/10/2016 08:45

ID, it really isn't - just over £50k of trades have sent the share price up 1.62p already today.

This is still only a £14m m/cap company. The share price could be back at 30p in a jiffy - or more - with a little more buying and a press mention or two on the Innovenn spin-off.

[investordave] 04/10/2016 08:24

Sadly, it's a long way back up to 28/29p per share.

[shanklin] 04/10/2016 08:13

Indeed, very poor information management. And why did they fail to state they expected to make a profit in the current year given the earlier statements to that effect. They even made the Innovenn resolution seem much further away than has proved to be the case.

All IMHO.

[investordave] 04/10/2016 08:07

What a shame the company didn't announce this news with the H1 results.

[shanklin] 04/10/2016 08:03

I was one of yesterday's sellers but have bought back in following today's RNS. Hopefully this will at least isolate VENN from Innovenn going forward.

[yump] 04/10/2016 07:51

timbo003

I imagine the sorting out of the deal is why Venn committed the heinous crime of saying they 'hoped' to update the market on Innovenn in July.

These things show how spooked people have got by AIM even when they think a business is sound.

Unless they are pushing a blue sky stock of course ;-)

[adamb1978] 04/10/2016 07:49

Rivaldo

Correct, summary though the plan is to definitely list the new business and distribute the shares to VENN shares.

So whereas before you had a share in VENN which included the loss-making Innovenn and to which no value was being attributed, now you will have 1 share in a more profitable VENN plus 1 share in a punt/growth stock. Even if the later ends up being worthless, VENN is more profitable now - the losses last year were roughly 0.6p per share.

Adam

[timbo003] 04/10/2016 07:38

I wonder if the seller yesterday is beginning to wonder if they should have held off for a couple more days.

On a sum of the parts basis, this makes Venn look quite a bit more valuable than it did yesterday

I suspect the equivocation on whether to distribute the new shares in Intergumen to Venn shareholders is at least partly down to LivingBridge (Baronsmead VCTs) who will not want a blue sky company like Intergumen in their portfolios

[rivaldo] 04/10/2016 07:28

VENN will initially own 70% of a Newco (Integumen) which is to be set up as a consolidator of healthcare technologies, by converting its loan to Innovenn into shares in Integumen.

Integumen is to buy 3 more businesses in close order and will float on AIM "in due course", which I'd suggest is pretty quickly. Once the acquisitions go through (assuming they do), VENN will own 30% of the enlarged company, at which point VENN will either retain the shares or distribute them to shareholders.

This will crystallise a £0.96m profit for VENN in this year's accounts.

The theoretical sale price of £4.74m is much more than I was thinking would be raised, though of course it's not cash.

Quite exciting stuff...

[shanklin] 04/10/2016 07:05

Interesting RNS which I am finding difficult to understand.

[shanklin] 04/10/2016 07:03

ID

Suggest you ask VENN why they are no longer talking about making a maiden profit? This seems quite bizarre given what they wrote in the AGM statement.

[buywell3] 04/10/2016 03:30

Chart support at 18.5p

[cocker] 03/10/2016 18:34

Any investor should be totally focused on the share price of any company they are invested in. I wish I had the foresight to have sold up last week. It just seems to big a fall for no reason as far as I am concerned.

[investordave] 03/10/2016 16:52

Have just emailed the company about the market's reaction to its H1 results. Will let you know what if any reply I get.