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Biotech / Medical : Visible Genetics Inc.(VGIN) -- Ignore unavailable to you. Want to Upgrade?

To: Robert G. Hanah who wrote (303)	7/9/1999 11:24:00 AM
From: Kelton	Read Replies (1) \| Respond to of 337

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-