EDISON, N.J., June 18 /PRNewswire/ -- New Brunswick Scientific Co., Inc. (NBS)(Nasdaq: NBSC - news), today announced that it has reached an agreement with an institutional investor in Copenhagen, Denmark, to infuse capital into DGI BioTechnologies, Inc., the Company's drug-discovery subsidiary, in exchange for an ownership stake. DGI's headquarters will remain in Edison, New Jersey.
New Brunswick Scientific co-founder and Chairman David Freedman said, ``Early in 2000, we announced our intention to mitigate the negative cash flows related to DGI and restructured it from a limited liability company to a C-corporation to facilitate the process. According to the agreement signed on Friday, $5 million will be infused into DGI, reducing NBS' equity stake from 84 percent to under 50 percent.''
Mr. Freedman continued, ``This agreement accomplishes several important objectives. It provides our shareholders with upside potential, as we have retained an equity interest in DGI. It also frees us from the substantial cash outlays related to DGI's ongoing development. Moreover, DGI benefits from the fresh infusion of working capital necessary to further develop its promising technology.''
The Company indicated that there is a likelihood of participation (but no existing commitment) by additional investors. If additional parties invest in DGI, NBS' ownership percentage would be further diluted. Going forward, DGI's financial results will be accounted for by NBS using the equity method.
New Brunswick Scientific Co., Inc., designs and manufactures a wide variety of research equipment and scientific instruments for the life sciences and holds a minority equity position in DGI BioTechnologies, Inc., a drug-lead-discovery operation. |
