07/09 07:58 FULL TEXT-Visible
Genetics<VGIN.O> gets investment
(Full text of press release from Canada NewsWire)
Visible Genetics to Receive US$30 Million in Equity Capital From
E.M. Warburg, Pincus & Co., LLC
- Company Estimates Second Quarter Revenues -
TORONTO, July 9 /CNW/ -- Visible Genetics Inc. (VGI) (Nasdaq:
VGIN) announced today that E.M. Warburg, Pincus & Co., LLC, one
of the world's leading private equity investment firms, has signed a
Letter of Intent to invest US$30 million in VGI. In consideration for its
investment, Warburg will receive preferred stock convertible at
US$11.00 per share and 1,100,000 warrants exercisable for a
four-year period at US$12.60 per share. In addition, Warburg will
receive a seat on the Company's Board of Directors.
"I am pleased that Warburg has made this substantial commitment
to VGI," said Richard T. Daly, President and CEO. "Coupled with our
broad product offerings and strong management team, this
investment provides the foundation for the Company's growth and
development. VGI will use the proceeds to continue development and
commercialization of its HIV, hepatitis B and C, and tuberculosis
GeneKit(TM) products."
Contemporaneously with the Warburg investment, Hilal Capital
Management LLC will convert US$3.9 million of its existing loan to
VGI, on the same basis. VGI's remaining US$4.1 million in debt will
be retired using the proceeds from the Warburg investment. After
these transactions, VGI will have approximately US$27 million in
cash on its balance sheet and will have repaid all existing loans.
Dividends will accrue on the preferred stock at 9% per year during
the first 3 years and at 4% per year thereafter. Dividends in cash will
be payable only after the third year and then only at the Company's
option; accrued but unpaid dividends will be convertible. One third of
the preferred stock must be redeemed in each of 2006, 2007 and
2008 at a price equal to the amount invested plus accrued dividends.
If the Company fails to redeem the shares as required, holders may
appoint a majority of the Company's board. Preferred stockholders
will have the right to participate on a pro rata basis in future
Company financings, subject to certain exceptions. The Company
has agreed to file a registration statement to register the common
shares underlying the preferred stock and warrants by October 30,
1999, and will grant certain other standard registration rights to the
holders. Closing of the transaction is subject to the completion of
definitive agreements and satisfaction of various closing conditions.
As previously announced, the Company, in consultation with its
auditors, PricewaterhouseCoopers LLP, has initiated a revised
accounting methodology related to the timing of recognizing certain
sales. In line with this policy, management believes that second
quarter revenue will be approximately US$1.9 million.
Visible Genetics Inc. manufactures and markets high performance
automated DNA sequencing systems and complete kits for the
analysis of genes linked to disease. The Company's OpenGene(TM)
system employs proprietary stratified DNA testing and single-tube,
single-step sequencing methods to significantly reduce the time and
cost involved in identifying clinically relevant genetic information. VGI
is a leader in the emerging field of pharmacogenomics, which will
use genetic information in the identification, and analysis of genes in
order to improve patient care and reduce healthcare costs.
E.M. Warburg, Pincus & Co., LLC and its affiliates comprise a
specialized financial services organization that manages US$7 billion
of investments in its private equity investing activities, with a further
US$4.5 billion available for investments. This press release contains
forward-looking statements within the meaning of the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to risks, uncertainties
and other factors that may cause the Company's results to differ
materially from expectations. These include risks relating to the
ability to obtain regulatory approval, market acceptance of genotyping
and the Company's products and other risks detailed from time to
time in the Company's SEC filings, including its prospectus dated
January 4, 1999 and most recent Annual Report on Form 20-F.
These forward-looking statements speak only as of the date hereof.
VGI disclaims any intent or obligation to update these forward-looking
statements.
-0- 07/09/1999
/For further information: Richard T. Daly, Chief Executive Officer,
416-813-3281, or Bruno Maruzzo, Investor Relations, 416-813-3271,
both of Visible Genetics/
/Web site: visgen.com
(VGIN) CO: Visible Genetics Inc.; E.M. Warburg, Pincus & Co., LLC
ST: Ontario IN: MTC HEA FIN SU: FNC
-30-
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