Imaging Biometrics Ltd (LSE:IBAI, OTCQB:IQAIF), the London-listed medical technology company, has bought a controlling stake in Kirkstall, a Sheffield-based firm known for its lab systems that mimic the way organs interact inside the human body.
The deal, worth £170,000, gives Imaging Biometrics 86% of Kirkstall, with plans to acquire the remaining shares soon after.
Kirkstall’s flagship product, the Quasi Vivo system, connects miniature chambers that allow living cells to grow in conditions closer to those found inside people. It helps scientists test how drugs might behave across different organs, something that’s difficult to do using conventional petri dishes or static cultures.
Under the agreement, Imaging Biometrics will pay most of the purchase price to Truetide, an AIM-listed investment company that owned the majority of Kirkstall.
Rather than paying cash upfront, Imaging Biometrics is issuing Truetide a £170,000 unsecured convertible loan note, which carries 6% annual interest and can be converted into shares by the end of 2027.
The conversion price will be set at the lower of 7.5p a share or the price of any fundraising that takes place before conversion.
The deal also includes a cash element of just under £24,000, which will be used to buy out the smaller shareholders in Kirkstall.
Kirkstall’s Quasi Vivo system is already in use at several UK universities and research institutions, and sales are beginning to grow overseas.
The company has its sights set on the United States, where demand for more realistic lab testing systems is rising. Imaging Biometrics said it believed its own experience and network in the biomedical imaging field would help Kirkstall accelerate that expansion.
There is a close link between the two companies. Truetide holds around 29% of Imaging Biometrics, and both firms share a director, Trevor Brown.
Because of that overlap, the transaction was treated as a related-party deal under stock exchange rules. Independent directors reviewed the agreement and concluded it was “fair and reasonable” for other shareholders.
Brown did not take part in the discussions or vote on the decision.
Imaging Biometrics said the acquisition would bring in technology that complements its existing work and strengthen its position in the fast-growing market for advanced cell-based testing systems.