Medical Australia (ASX:MLA) plans to focus on growing its human healthcare business and divesting its animal healthcare business.
In December 2013, the company finalised the acquisition of animal healthcare and stem cell technology provider MediVet Pty Ltd.
Since then, it has added directors and management and raised additional capital.
However, following a review of various business operations, the company has concluded that it has neither the financial nor human resources to fully pursue the potential of both the Human Healthcare business and Animal Healthcare business opportunities that have been presented.
Significant growth opportunities have been identified in both business sectors which will require additional capital resources to fulfil.
In particular the opportunities related to the Animal Healthcare business are predominantly in the U.S. and there are few if any synergistic benefits of common ownership of the business sectors.
The company has engaged Main Street Capital in conjunction with Corporate Capital Group to assist the process of looking for investors to take the MediVet business forward.
It has a 60.5% interest in MediVet with the remaining 39.5% held by interests related to the U.S. management.
The Human Healthcare business has been returned to profitability and management have identified a number of additional growth options.
These options will require funding for both investment acquisitions and working capital expansion.
It is expected that investment which has been directed to MediVet over the last eighteen months will now be freed up and enable the Human Healthcare opportunities to be fully exploited.
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