Deepverge PLC (AIM:DVRG) Acquisition; Loan Facility for global expansion

Acquisition of engineering services company for £ 1.1 million to assemble Microtox®PD in-house

£25 million mezzanine loan to support continued growth of revenues that have doubled for three successive years

DeepVerge (LSE:DVRG.L) announces the acquisition of engineering services company Glanaco Limited (“Glanaco”) for consideration of, in aggregate, £1.08 million comprising 0.65 million in equity and 0.43 million in cash. The equity issue consists of 4,550,000 new ordinary shares of 0.1 pence (“New Ordinary Shares”) issued at a price of 14.25p (being the closing mid-market price at close of business on 14 March 2022) with a 12 month lock-in and orderly market agreement . The acquisition brings the testing, assembly and commissioning of new generation of Microtox®PD (real-time pathogen detection in wastewater) in-house. The New Ordinary Shares to be issued represent 2.07% of the enlarged issued share capital of the Company. The consideration paid is calculated at 4.8 times 2021 (unaudited) EBITDA of £0.222 million. The transaction was simultaneously agreed and completed on 16 March 2022.

The Company has also secured a mezzanine loan facility of up to £25 million (“Facility”), with Riverfort Global Opportunities PCC Limited and YA II PN, Ltd, available for 3-years in the form of 12-month mezzanine loan notes to fuel momentum across all divisions of the Group. The initial drawdown of £4 million will be used for;

1. the Glanaco acquisition;

2. expansion of manufacturing capacity and laboratory space in the US for the Skin Trust Club; and

3. maintaining the growth trajectory of equipment production and build on the increasing demand the Group is experiencing for its products and services across all divisions.

The Facility provides flexible draw down facilities at an interest rate of 1% per month on the outstanding funds drawn down. The loans are convertible at a 40% premium to a 5 day volume weighted average price (“VWAP”) prior to the date of each draw down. Further details are provided in the Loan Facility section of this document.

Gerry Brandon CEO DeepVerge plc commented:

“Over the last 3 years, while demand for our core offering has increased year on year, through the uncertain times that include the global health pandemic, we invested heavily in adapting the amazing technology in all divisions, creating next-generation products and services which are now showing worldwide demand. We also managed supply chain challenges, during the pandemic and the increasingly isolationist direction of the post-globalisation by using out-sourced third parties.

This £25 million mezzanine loan ensures availability of funds for growth, avoids stock market fluctuations, eliminates the need for a discounted equity dilution of shareholders and the Glanaco acquisition underwrites our ability to take control of our supply chains and manage scale to meet the growing global demand being experienced by the company.”

“With our production order book for Q1 2022, the largest in the history of the Company, these strategic moves keep our mission intact and ensures momentum is maintained this year and beyond”.

Areas of investment

1. DeepVerge to acquire engineering services company Glanaco for £0.65 million equity @ 14.25p and £0.43 million in cash.

Covering 6,000 square meters for assembly and logistics, located in Cork, Ireland, Glanaco designs, manufactures, assembles, and distributes mechanical and electronic products in sensor and detection, remote monitoring and robotic extension solutions. It serves partners and customers in a range of sectors including local authorities, utilities, oil and gas, mining, data centres and construction across the EU, UK and US. Glanaco has nine employees.

Glanaco has been a collaboration partner and contractor in the production assembly and testing of Modern Water’s Microtox®PD equipment since August 2021, as part of the DeepVerge €2.8 million expansion programme, supported with a €750,000 grant from Irish state support funder, Enterprise Ireland. This engineering expertise, scalable manufacturing capacity and logistics facility in Cork, Ireland, along with existing long term supply chain partners across the world, allows the Modern Water division of DeepVerge to accelerate production expansion in Europe.

The Glanaco acquisition delivers cost savings, increases control and mitigates risk of supply chain bottlenecks delivering in-house engineering expertise to drive efficiencies and lower uncertainty where supply chain disruption is seen as a barrier to global growth. With production in-house and combining with the existing DeepVerge technology centre of excellence in Fermoy Cork, Ireland and axis with the York UK, laboratories, this acquisition allows continued innovation while maintaining rapid deployment of our Modern Water pathogen detection and identification solutions across Europe, the US, India and China.

In the year ended 31 December 2020, the most recent year for which accounts have been filed, Glanaco Limited posted profits before tax of £214,731 on turnover of £1.101 million. At 31 December 2020 it had net assets of £339,978. Its unaudited accounts for the year ended 31 December 2021 show profits before tax of £218,315 on turnover of £1.362 million, and net assets at the year end of £524,255.

2) Expansion of Skin Trust Club in the US

The funding also underwrites the growth plans within the life science division, comprising both Labskin and Skin Trust Club. The Group will immediately increase the genome sequencing footprint at its North American Headquarters in New Castle, Delaware. This includes upgrading the existing laboratories, adding new equipment, and recruitment of staff at technician, informatician, scientist and customer services levels.

The facility in New Castle, Delaware will facilitate Skin Trust Club roll-out across cities on the East coast of North America. This expansion plan is designed to meet expected demand for 2022, based on the proven track record in the UK, Ireland, following the well-received soft launches in the US late last year.

Skin Trust Club is a consumer market skin testing service, making personalised skincare a reality. From laboratory test results of the Club member’s skin microbiome – for the first time – gives a comprehensive scientific based, user friendly, understanding of skin type with recommendations of products and ingredients, designed to nourish and balance the skin microbiome. 58% of club members have indicated a desire to manage known skin conditions of the outer body from scalp to feet and this funding allows the Labskin teamwork towards medical device accreditation as a medical device test platform for skin disease diagnosis.

Loan Facility

The Company has also entered into an agreement whereby it has secured a £25 million 3 year loan facility (“Facility”) with Riverfort Global Opportunities PCC Limited and YA II PN, Ltd (together “the Lenders”)


The Commitment Period under the Facility is 3 years from 16 March 2022. Each advance (“Advance”) must be repaid in full by the first anniversary of each drawdown (“Maturity Date”).


Interest applies on the outstanding amounts drawn down at a rate of 1.0% per month.


An implementation fee of 5% of each Advance in cash is immediately deductible from the principal amount on transfer of funds.


The Lenders may elect, at their discretion, to issue a conversion notice (“Conversion Notice”) to convert any unpaid balance into ordinary shares of 0.1p (“Ordinary Shares”) in the Company at a subscription price (“Fixed Premium Placing Price”) for all Advances (excluding the Initial Advance) representing a 40 per cent premium to the average daily volume weighted average price (“VWAP”) for the previous 5 days’ trading prior to the drawdown of the relevant amount (“Reference Price”) and for the Initial Advance at a subscription price (Fixed Premium Placing Price”) representing a 40.8 per cent premium to the VWAP.

The VWAP for the previous five trading days ending on 15 March 2022 is 14.2025p making the Fixed Premium Placing Price 20.0p.

If prior to the Maturity Date the Company issues and allots new Ordinary Shares (“New Share Issuance”) at a price per share below the Reference Price, then the Fixed Premium Placing Price shall be amended to 100% of the price per share in respect of the relevant New Share Issuance.

The Company may elect not to repay the Advances that fall due (see below) and, in such circumstance, the Lenders will have the option to convert the Advance’s principle and interest and any relevant outstanding fees into the Company’s Ordinary Shares at a price equal to the lower of (a) 80 per cent. of the average of the two lowest VWAPs in respect of Ordinary Shares during the 10 business days immediately preceding the date of the Conversion Notice and (b) Fixed Premium Placing Price up until the Maturity Date.


The Lenders will receive Warrants of 40 per cent. of the value of each Advance, with the number of Warrants to be issued is being calculated by dividing the Advance by the Reference Price. For the Initial Advance 11,265,622 Warrants will be issued with an exercise price of 20.0p (being the same as the Fixed Premium Placing Price).

Conversion Authorities:

At the date of the drawdown of Initial Advance:

a) (non- pre-emption share) authorities in respect of 25,170,180 Ordinary Shares will be reserved as available to the Lenders solely in respect of conversion rights for the Initial Advance; and

b) No authorities required in respect of warrants for the Initial Advance (“Warrants”).

The Company will convene a general meeting (“GM”) before 31 July 2022, at which a resolution will be put to shareholders to grant the requisite authorities to issue the Warrants in respect of the Initial Advance and as are required to satisfy the Lenders conversion rights in respect of the Initial Advance multiplied by a factor of 1.5.

Further Advances under the Agreement:

For future Advances under the Agreement the Reference Price will be the average of the VWAP for the previous five trading days preceding the applicable Drawdown Date, with the Fixed Premium Placing Price being at a 40 per cent. premium to such Reference Price with regard to conversion rights and exercise price of applicable Warrants.


Secured by a composite guarantee.


No Advance may be prepaid. The Initial Advance is repaid by the payment of £500,000 on the last business day of months 7,8,9,10,11 and the balance of £1,500,000 on the Maturity Date.

Other terms:

The Agreement includes general undertakings, warranties and indemnities from the Company in favour of the Lenders. Standard events of default provisions apply, including failure to repay, failure to allot shares, failure to allot Warrants, ceasing trading on AIM and insolvency.

Admission and Total Voting Rights

The New Ordinary Shares were allotted on 17 March 2022. They will be issued credited as fully paid and will rank pari passu with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of Ordinary Shares after Admission.

Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that the New Ordinary Shares will be admitted to trading on AIM at 8.00 a.m. on or around 22 March 2022.

Following Admission, the Company’s total issued share capital will be 219,706,378. As the Company does not hold any shares in Treasury, this figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company following Admission.

For further information please contact:

DeepVerge plc

Gerard Brandon, CEO

+44 (0) 7340 055 648

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