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Forecast upgrade for EKF

Acquiring Advanced Digital Laboratory (ADL) has sparked a substantial upgrade for EKF Diagnostics (LON: EKF).

ADL is a Texas-based PCR-focused testing laboratory operator. It is certified under the Clinical Laboratory Improvement Amendments (CLIA) for complex testing. The deal costs an initial $10m in shares. Performance-based consideration could be payable over three years. This is capped at $60m.

This is a new business that was founded in May 2020, but it does have an experienced management. ADL undertakes Covid testing in the US, and it offers a range of other testing. EKF will invest to increase capacity and its own diagnostic products could be offered by ADL.

In the six months to June 2021, revenues were $6.3m and EBITDA was $2.6m. The business is cash generative.

As long...

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