In M&A news on Australian stocks, Telix Pharmaceuticals (AU:TLX) is buying Canadian private company ARTMS Inc. in a cash and stock deal valued at AU$126 million to bolster its supply chain. The transaction includes consideration of 5.67 million Telix shares worth AU$65.3 million and an upfront cash payment of AU$23 million.
As part of the deal, Telix will also give AU$37.6 million in future cash payouts, subject to meeting certain pre-determined milestones. TLX shares rose 2% in early trading this morning on the news.
Here’s Why Telix is Buying ARTMS
Telix is a clinical-stage biopharmaceutical company engaged in the development of diagnostic and therapeutic products by leveraging Molecularly Targeted Radiation (MTR). Meanwhile, ARTMS is a venture capital-backed technology firm, which specialises in cyclotron-produced radionuclides.
ARTMS creates tools, technology, and products that will enhance Telix’s supply chain and manufacturing of diagnostic isotopes. Plus, ARTMS’ state of the art technology will help in reducing production costs and facilitate manufacturing of highly efficient, commercially important medical isotopes.
Importantly, acquiring ARTMS will help speed up the rollout of Zircaix kidney cancer imaging in the U.S. Moreover, ARMTS and Telix have been collaborating since 2020 on the use of cyclotron-produced gallium-68 to manufacture a higher version of Illuccix, Telix’s lead prostate cancer imaging product. The ARTMS deal will fast-track this process. The acquisition is expected to be financially accretive, increase revenue, and have a positive impact on the gross margins of Illuccix and Zircaix.
Is Telix Pharmaceuticals a Buy or Sell?
With five unanimous Buy ratings, TLX stock has a Strong Buy consensus rating on TipRanks. The Telix Pharmaceuticals share price target of AU$13.71 implies 13.9% upside potential from current levels.
