Vet test spinout sold in £5m deal

UNIVERSITY life science spinout ReactivLab has been sold in a deal worth up to £5 million.

The Glasgow-based company, which specialises in diagnostic tests for animals, has been acquired by AIM-listed Avacta Group.

The price paid will depend on sales achieved by ReactivLab in the second and third years following completion. ReactivLab's last reported accounts to 31 July 2009 showed revenues of 142,079 and pre-tax losses of 142,596.

ReactivLab was spun out of the University of Glasgow's Veterinary School by Professor David Eckersall to develop tests to detect infections, diabetes, hypertension and cardiovascular disease in pets and livestock.

Eckersall, who is also chief scientific officer of ReactivLab said the deal would provide a "significant stimulus to the commercial expansion" of the firm's work. "It is a reflection of the know-how and expertise that we have built up and the innovative applications that we have created."

Alastair Smith, chief executive of Leeds-based Avacta Group, said the potential for diagnostic products for the veterinary market was "huge". ReactivLab has estimated it could be worth 250m a year.

ReactivLab, a finalist for most promising new company in last year's Scottish Enterprise Scottish Life Sciences Awards, has worked on research as part of the ITI Life Sciences programme.

Avacta was spun-out from the University of Leeds in 2004 by its current management team as a biophysics company to develop innovative technologies and expert technical services to the biopharmaceutical and healthcare sectors.

In another buyout of a Scottish company by an AIM-listed group, Edinburgh cloud computing business DigiMIS has been acquired by K3 Business Technology in a 2.1m deal.