Special Situations – Resources

by Josh
Aug , 14
Special Situations – Resources

The Neu Capital Special Situations team raised US$60m in debt capital to fund MyDNA’s acquisition of Gene by Gene (“GbG”).  MyDNA is an Australian based company with a leading set of algorithms for interpreting DNA data into useful and practical reports that can be used by both medical professionals (pharmacogenomic reports) and consumers (nutrigenomic reports).  Over the last 18 months, myDNA has developed an online mobile application which they are rolling out to their customers through a subscription-based model.

GbG is a Houston, Texas based provider of DNA laboratory services.  The merger will combine GbG’s best in-class DNA laboratory facilities with MyDNA’s compelling DNA interpretation IP to create a market leading, vertically integrated DNA company offering precision pharmacogenomics, nutrigenomics and wider insights to consumers through a range of channel partnerships and online mobile platforms.

The acquisition was principally funded by a US$60m structured debt solution with Neu Capital acting as joint advisors.  There was limited physical security and lending was structured off the forecast cashflow of the group.  Historical earnings were in decline at the target that was offset by the emerging RNA (Covid tests) which was providing significant short term contributions.  Neu Capital was able to conduct a deep dive into the earnings stream / customer base of GbG to enable the incoming US financier to get to leverage levels that were > 3x Debt / EBITDA with limited cash equity contribution