BATM Advanced Communications Limited (LON:BVC) has received an investment in its medical diagnostics arm Adaltis that values the subsidiary at US$58mln.
Chinese partner Egens Biotechnology Company has paid US$2.85mln for a 4.9% stake in Adaltis and is providing a US$1.5mln shareholder loan.
Egens has the option to acquire a further 10% stake 90 days after the approval of either Adaltis' 2016 or 2017 financial statements for 5.5-times turnover.
READ: The announcement in full
"China is one of the world's largest and growing markets and a key target market for our biomed solutions,” said BATM chief executive, Dr Zvi Marom.
“We are pleased that our long-term partner has completed the investment in Adaltis.
“We expect to be able to serve and support major customers in China and gain market share in this important market."
Group undervalued
At 11.40am, BATM shares were up 8% at 19.19p, valuing the business at US$95mln.
“The valuation of Adaltis by its regional partner shows just how undervalued the group is in general,” said broker finnCap in a note to clients.
Analyst Lorne Daniel pointed out the business was only 13% of BATM’s group revenues in the first half, who reckons Adaltis has “huge growth potential”.
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