Birmingham husband and wife team John and Sharon Stirling today sold the firm they set up 20 years ago for more than £16 million - but both are staying with the business.
Kings Norton-based BioCare has been snapped up in a £16 million deal by Neutra-Health, a shell company backed by curry king Sir Gulam Noon, chairman and founder of Noon Products, one of the largest suppliers of Indian food products to a number of major supermarkets, including Sainsburys, Waitrose and Morrisons.
BioCare employs 46 people and is an established provider of vitamins, minerals, probiotics, fish oils and other food supplements to general practitioners and healthcare specialists. It was set up by John and Sharon Stirling in 1985 and began distributing a single nutritional supplement product in 1987.
Today BioCare is a distributor of natural healthcare products, developing and selling over 170 products including Bio- Acidophilus and FloraGuard.
Both Mr and Mrs Stirling have agreed to remain with the business. The deal means Mr Stirling will be able to concentrate on product development.
NeutraHealth, which started trading on the Alternative Investment Market in February to acquire companies in the nutraceutical industry, is paying £14.1 million in cash.
A further £1 million will be payable in NeutraHealth shares, while the remaining £1 million will be payable 12 months after completion of the deal and will be payable either in NeutraHealth shares or loan notes, at the company's sole discretion.
NeutraHealth is planning to raise £10 million through the issue of 95,238,095 placing shares to partly fund the takeover, at a placing price of 10.5p per share.
In a statement to the Stock Exchange, NeutraHealth said: "The acquisition, which constitutes a reverse takeover, is subject to shareholder approval which will be sought at a NeutraHealth EGM on August 30."
Last year BioCare notched up an operating profit of £2.1 million. Sales during the year rose 10.5 per cent to £7.5 million. NeutraHealth added: "Despite this strong financial performance, the board of NeutraHealth and the vendors believe there are opportunities for improved marketing, development of export channels, as well as innovative products for the Nutraceutical market.
"The board has negotiated for the vendors to remain in the business and have ensured they have a substantial interest in the success of the enlarged group and are incentivised to build on the ongoing success of BioCare. Aside from opportunities to improve the existing BioCare business, the NeutraHealth board also believe upside will be realised as part of the enlarged NeutraHealth group.
"As NeutraHealth acquires new businesses, the anticipated increase in number and variety of products may enable coverage across a number of channels potentially increasing access to other markets."
Martin Gatto, chairman of NeutraHealth, added: "We are pleased that we have announced this acquisition only months after admission to AIM and are confident that we are on track to continue acquiring new businesses and in so doing generate above average returns for those investors who have supported us."
Michael Toxvaerd, Neutra-Health chief executive, said: "To buy a company with a great reputation in the industry and one which is already profitable and growing is a very positive first acquisition for us.
" I am confident the combined experience of the board of NeutraHealth as well as that of the vendors and existing management will enable us to develop the business to its full potential."
KBC Peel Hunt, which has a corporate finance office in Birmingham, were the nominated broker and KBC Bank, which also has a Birmingham branch, both assisted with the fundraising and debt facility for the acquisition.