GUMM agrees to buy the part of Gel Tech they didn't own:
siliconinvestor.com
Gum Tech International, Inc. to Acquire Remaining Interest in Gel Tech, LLC
PHOENIX, Oct 30, 2001 /PRNewswire via COMTEX/ -- Gum Tech International, Inc. (Nasdaq: GUMM chart, msgs) announced that it has entered into a non-binding Memorandum of Understanding providing for the purchase of Zensano, Inc.'s forty percent interest in Gel Tech, LLC, which produces and sells Zicam Cold Remedy and Zicam Allergy Relief. Gum Tech currently owns the remaining sixty percent in Gel Tech, LLC. Zensano, Inc. is a wholly-owned subsidiary of Zengen, Inc., a privately held company in California.
"We have reviewed multiple investment opportunities since the sale of our gum operations in July and determined that increasing our ownership position in Gel Tech to be one of the most attractive and timely," said Mr. Carl J. Johnson, President and Chief Executive Officer of Gum Tech.
"Under the Zicam brand name, Gel Tech currently offers two successful, unique products that we believe we can take to an even higher level of business success. We know this business well and we believe there is significant opportunity to increase domestic distribution, integrate the international marketplace, achieve operating efficiencies, and take advantage of product line extension opportunities," continued Mr. Johnson.
Under the terms of the non-binding Memorandum of Understanding, Gum Tech would pay $6.1 million in cash at closing and make four subsequent cash payments of $2.75 million each, spread out over the next two years. Subject to satisfying closing conditions, we believe the transaction will close in the fourth quarter of 2001. Mr. Johnson concluded, "This transaction will position Gum Tech to control the destiny and better manage the financing of our Zicam operation. In addition, Gum Tech retains significant cash resources which will allow us to build the Zicam brand while continuing to explore other investment opportunities."
Gum Tech International, Inc. is an innovative nutrient and drug delivery technology company engaged in the development, manufacture and marketing of delivery systems for bioactive compounds. Gum Tech is the owner of Gel Tech, LLC, which markets Zicam(TM) Cold Remedy, a patented, revolutionary homeopathic remedy that significantly reduces the duration and severity of the common cold, and Zicam(TM) Allergy Relief, a homeopathic remedy designed to provide relief to allergy sufferers. In a study published in the October 2000 issue of the ENT - Ear, Nose & Throat Journal, Zicam(TM) Cold Remedy was shown to reduce the duration of the common cold by an average of 75% when taken at the onset of symptoms.
For additional information, please contact Lynn Romero, Manager of Investor Relations, 602-387-5353, lromero@gum-tech.com. Gum Tech is located at 2375 East Camelback Road, Suite 500, Phoenix, AZ 85016. |
