NetScientific has exited its loss-making portfolio companies Vortex and Wanda after originally deciding to close the two medical diagnostics ventures last week.

Commercialisation firm NetScientific sold its majority stakes in US-based medical diagnostics portfolio companies Vortex Biosciences and Wanda on Friday to investment firm EMV Capital for £150,000 ($199,000). NetScientific had opted to close the two businesses through an orderly wind-down last week as it had concluded an earlier EMV Capital approach was insufficient to cover the costs of funding them through due diligence and negotiations. However the company was satisfied revised terms from EMV, through its vehicle Deeptech Disruptive Growth Investments, would alleviate difficulties surrounding timeline and execution risk. NetScientific revealed it respectively held approximately 95% and 70.8% of the common stock in Vortex and Wanda prior to the acquisition, in addition to all preferred shares in Wanda. The company also had outstanding loans to Vortex worth $29.4m that EMV Capital has taken on as part of the deal. Wanda was founded in 2011 to commercialise a remote healthcare analytics and management platform for chronic diseases, while Vortex Biosciences was formed the following year to pursue diagnostics research into circulating cancer tumour cells. The companies were, respectively, responsible for pre-tax losses of $6.8m and $1.8m in NetScientific’s consolidated accounts for 2017, having racked up net liabilities of $22.4m and $12.2m by the end of that reporting period. Exiting Vortex and Wanda means NetScientific has reduced the capital requirements of its portfolio going forward, focusing its attention on ventures that do not require further investment. NetScientific will use proceeds from the disposals to meet its ongoing working capital obligations. The firm had a cash balance of $4.2m at the end of 2018, weighed down by projected central costs of $2.6m per year.

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