Avacta to pay up to £5m for vet test group Reactivlab

York-based Avacta, which was spun out of the University of Leeds, will pay an initial consideration of 80,000 made up of 4.4 million ordinary shares and two deferred payments which will depend on sales in the next two to three years. The maximum payment has been capped at 5m.

Reactivlab has developed a range of veterinary diagnostic tests for animal health which will fit in well with Avacta's business.

Reactivlab reported revenues of 142,000 in the year to July 31 with pre-tax losses of 143,000.

The company was spun out of the University of Glasgow's world leading Veterinary School by its founder Professor David Eckersall.

The company develops Acute-Phase Protein (APP) tests for veterinary healthcare.

The tests have a widespread use in veterinary diagnostics and are complementary to the current diagnostic tests being developed by Avacta Animal Health.

Avacta is in a position to immediately commercialise the tests through its Animal Health diagnostic testing laboratory services.

Avacta chief executive Alastair Smith said: "The combination of Reactivlab's established tests and world leading expertise in veterinary acute phase protein testing, with Avacta Animal Health's ability to commercialise veterinary tests, places us in a strong position to lead the growth in APP testing in this market.

"We believe this will lead to substantial commercial and clinical value from a huge untapped marketplace."