Strategic acquisition of Airon Corporation

Highlights

• Provides an established platform to accelerate Inspiration Healthcare's commercial strategy in the USA and the rest of North America
• Adds a complementary portfolio of FDA cleared products
• Acquisition expected to be earnings accretive in the second full year of ownership

Inspiration Healthcare (AIM: IHC), the global medical technology company, announces the acquisition of Airon Corporation ("Airon") a specialist respiratory device company based in Florida, USA for a maximum consideration of $2.5m. The consideration includes an initial upfront cash payment of $1.5m plus an earn out of up to $1.0m dependent on the delivery of future revenues.

Overview of Airon

Airon is a leading manufacturer of specialist pneumatic oxygen-powered life support ventilators, which have multiple uses including in Magnetic Resonance Imaging (MRI) machines and transportation for neonates through to adults. The company also sells a complementary range of continuous positive airway pressure ("CPAP") devices, used in emergency medicine to support children and adult patients. Airon has 15 employees, including sales, marketing and tech support, and an established distribution network across the USA. In the year to 30 April 2023, Airon generated total revenues of $1.4m, a loss before tax of $0.4m and net assets of $1.3m.

Strategic rationale for the acquisition

The acquisition is in line with Inspiration Healthcare's long-term strategy to acquire companies with both complementary technologies and sales reach to expand the Group's global footprint, add scale and accelerate growth. The USA is a significant strategic market for the Group and the acquisition provides an established platform to support and de-risk the Company's commercial strategy. It is expected to be earnings accretive in the second full year of ownership.

In August 2023, Inspiration Healthcare submitted a 510K application to the FDA for the SLE6000 neonatal ventilator which, pending approval, it aims to launch in H2 FY2025. The acquisition of Airon provides an established platform for US market entry for the SLE6000 and other products in the Company's portfolio, enabling the Group to leverage Airon's established US presence, brand, and reputation for high quality specialist products. The Group will also add the Airon products to its portfolio to drive sales across its wider global distribution network.

The benefits of the enlarged group include:

• An established operation, in Melbourne, Florida with warehousing facilities, proven systems and processes for the US market and access to key neonatal units across the USA
• A recognised brand and experienced sales team and distributor network targeting the same customers
• A portfolio of complementary FDA cleared products that will allow further growth in the USA
• Synergistic neonatal products that can be sold through the Group's existing international sales channels
• Support for the Group's commercial strategy in Canada
• Expected to be earnings accretive from the second full financial year of ownership

Terms of acquisition

Inspiration has acquired Airon for $1.5m cash paid at completion. An earn out of up to $1.0m cash is payable based on Airon achieving certain net sales targets in the 12 months to 30 April 2025.

The acquisition will be funded through the Company's existing resources.

Eric Gjerde, founder, President, and CEO of Airon will stay involved in the company to help manage the transition whilst Inspiration Healthcare search for a permanent new General Manager for the North American business as the Group looks to invest in the business in the forthcoming years.

Neil Campbell, CEO of Inspiration Healthcare, commented: "The acquisition of Airon is an important strategic milestone for Inspiration Healthcare. The potential approval of the SLE6000 represents a significant commercial opportunity and Airon gives the Group an established direct presence and expertise in the USA, which will accelerate and de-risk our commercial strategy. Airon also brings a range of complementary products, which will further enhance our portfolio and enable us to increase sales in other markets. I am delighted to welcome the Airon team to Inspiration Healthcare and look forward to working together to provide lifesaving technologies to the US market."

Eric Gjerde, founder, President, and CEO of Airon said: "I am excited that Airon is joining Inspiration Healthcare. The Group has a strong portfolio of best-in-class products that will be of significant value to our customers. I would like to thank our customers and staff for their continued support as Airon embarks on the next part of its journey."

About Airon

Established in 1997, Airon Corporation proudly manufactures products in Melbourne, Florida and markets their innovative, reliable, effective, high technology pneumatic oxygen-powered life support ventilation and CPAP products and accessories throughout the world. Their products support neonates, infants, paediatrics, children and adult patients in EMS, hospital ER and trauma, MRI, OR, ICU and transport.