Novacyt Acquires Southern Cross Diagnostics for AUD 8.5 Million
Novacyt has announced the signing of an acquisition agreement for Southern Cross Diagnostics, an Australian distributor of diagnostic products. The deal values the target at AUD 8.5 million in cash, supplemented by a conditional earn-out of up to AUD 16.5 million over four years.
Acquisition Details
Novacyt has finalized an agreement to acquire the entire share capital of Southern Cross Diagnostics Pty Ltd, a Sydney-based distributor specializing in diagnostic and life sciences products. The initial price is set at AUD 8.5 million, equivalent to approximately GBP 4.4 million or EUR 5.1 million, payable in cash on the completion date. The transaction will be conducted through Novacyt Holdings UK Limited, a wholly owned subsidiary of Novacyt. Southern Cross Diagnostics has been operating since 2008 as a distributor for Yourgene Health, a subsidiary of Novacyt, since the acquisition of Elucigene Diagnostics in 2019. The acquisition provides Novacyt with direct access to the expanding Australian diagnostic market and a portfolio of key strategic clients in the region. It also allows for the integration of third-party products for distribution opportunities in other Asia-Pacific regions. For the fiscal year ended June 30, 2025, Southern Cross Diagnostics generated a revenue of approximately GBP 6.7 million (EUR 7.7 million) and a net profit of about GBP 0.8 million (EUR 0.9 million). In the first half ended December 31, 2025, the revenue amounted to approximately GBP 3.4 million (EUR 3.9 million).
Financial Structure of the Acquisition
The acquisition price includes a mixed structure with a conditional element. Beyond the initial cash payment, an additional earn-out of up to AUD 16.5 million will be paid based on the financial performance of Southern Cross Diagnostics over a four-year period ending February 28, 2030. This conditional earn-out depends on the achievement of cumulative annual EBITDA targets, with a mechanism providing for the payment of 83.3% of any target exceedance. Southern Cross Diagnostics is expected to generate more than AUD 30 million in EBITDA over the next four years for the full conditional payment to be made. Nick Thliveris, the founder and seller of Southern Cross Diagnostics, has agreed to invest up to AUD 0.8 million by subscribing to new ordinary shares of Novacyt in a capital increase with preferential subscription rights, to be carried out after the acquisition closes. The net assets of Southern Cross Diagnostics amount to approximately GBP 2.0 million (EUR 2.2 million) as of June 30, 2025, after adjustments for loans that will be repaid before the finalization. About GBP 2 million (EUR 2.4 million) of annual revenue will be removed from the combined operations, corresponding to the current direct sales of Novacyt to Southern Cross Diagnostics.
Growth and Market Outlook
Southern Cross Diagnostics has recorded significant growth over three fiscal years, from approximately GBP 2.4 million (EUR 2.8 million) for the fiscal year ended June 30, 2023, to GBP 6.7 million (EUR 7.7 million) for the fiscal year ended June 30, 2025. For the 2025 fiscal year, the gross margin was established at 39%. The company has 11 employees and distributes a range of products in the fields of molecular diagnostics, serology, and laboratory consumables to the life sciences industry in Australia. Nick Thliveris, founder and CEO, will remain at the helm of the company after the acquisition. The Australian clinical diagnostics market is expected to grow at an average annual rate of 8.5% between 2025 and 2030. The completion of the acquisition is subject to a capital reorganization prior to the sale, which will transfer all the issued capital of Southern Cross Diagnostics to Ardenna PTY Limited, acting as trustee of the Thliveris Family Trust.
