Vitrolife AB (publ) acquires Unisense FertiliTech A/S

Vitrolife AB has entered into an agreement to acquire all the shares of Unisense
FertiliTech A/S (“FertiliTech”), the market leader within the field of embryo
monitoring, time-lapse, for IVF.
Description of FertiliTech
FertiliTech has driven the clinical use of time-lapse imaging for IVF. Their
products have been used in more than 200.000 IVF treatments in 47 countries.
FertiliTech has its head office in Århus, Danmark. The company was formed in
2003 and has approximately 70 employees. FertiliTech and its subsidiaries had
net sales of approximately SEK 94 million in 2013 and reported income before
depreciation and amortization (EBITDA) of SEK -25 million. The company has
developed and produces and markets the EmbryoScope® time-lapse incubator, which
is used for the monitoring of embryos in approximately two thirds of all the IVF
cycles in the world where time-lapse technology is used.

Description of time-lapse
Time-lapse technology makes it possible to study the whole sequence of embryo
development in an undisturbed environment. With increased information on embryo
development there is greater potential for selecting an embryo that will result
in a pregnancy. Time-lapse technology means that a microscope with a camera,
which is placed in the incubator where the embryos are being cultivated, takes
images at short time intervals. The images are then played as a film that can be
analyzed at the clinic and together with the patients. This technology also
reduces the problem of the sensitive embryo being subjected to stress during
assessment, as without the use of time-lapse technology it must be taken out of
the incubator and transferred to a microscope for observation. Time-lapse
technology was introduced on the IVF market approximately 5 years ago and is
today used in more than 5 percent of all the IVF cycles in the world.

Background and rationale
Vitrolife has been active in the time-lapse market since 2012 via the product
Primo Vision, which has been both developed and manufactured by Vitrolife’s
Hungarian subsidiary. Today the time-lapse market for IVF may be divided into
two segments depending on the type of solution. The first solution is a
specially developed microscope that is placed in the clinic’s existing
incubator. Primo Vision is the market leader in this segment. The second
solution is a system where the incubator and the microscope have been
integrated. EmbryoScope® is the market leader in this segment. By adding
EmbryoScope® to Vitrolife’s current time-lapse product range, Vitrolife can
offer customers flexible time-lapse solutions on the basis of their needs and
requirements. It is expected that the acquisition will make a positive
contribution to future product generations, as the combined knowledge of the
development teams in Denmark and Hungary can be utilized for future product
development.

Vitrolife estimates that, after an introductory phase for the new technology on
the market, the time-lapse market will grow and in the long term have the
potential to become a standard tool in IVF treatment as a result of the improved
treatment results and the more efficient procedures enabled by the technology.

“On the strength of the knowledge that the acquisition of Primo Vision has
generated, we are now ready to take the next step in our time-lapse strategy by
acquiring the market leader in the area. Together with the rest of Vitrolife’s
product range, this creates an interesting foundation for future growth
opportunities,” says Thomas Axelsson, CEO of Vitrolife.

“With its global market presence, strong brand and complementary product range,
Vitrolife is the right strategic partner for FertiliTech now that we are about
to take the next step in our development towards increased sales and
profitability,” says Michael K. Reeslev, CEO of FertiliTech.

Proforma financial information
Combined proforma sales in 2013 for Vitrolife and FertiliTech amounted to SEK
547 million and income before depreciation and amortization (EBITDA) was SEK 90
million. The figures have been translated from DKK to SEK using an average
exchange rate of DKK/SEK 1.16 for 2013. The above figures are only intended as
an illustration and do not include the effects of synergies, implementation
expenses or depreciation and amortization of assets at fair value as a
consequence of allocation of the purchase sum for the acquisition.

It is expected that the transaction will affect Vitrolife’s EBITDA per share
negatively during 2014 and 2015 but contribute positively as from 2016 as a
result of increased sales due to the use of Vitrolife’s global market presence
and cost synergies.

Terms and time schedule
The purchase sum amounts on a debt-free basis to 1,980,000 newly issued shares
in Vitrolife, in accordance with the authorization from the 2014 Annual General
Meeting, and to a cash purchase sum of SEK 90 million. In connection with the
acquisition the company’s net debts will be offset against the purchase sum. It
is expected that the new share issue will mean a dilution of existing
shareholders of approximately 9 percent. An earn-out corresponding to a value of
1,308,656 shares may be paid in addition to the fixed purchase sum. The earn-out
will only be paid if certain defined sales objectives for the periods 2015 and
2016 to 2017 are met. Vitrolife will determine whether the earn-out will be paid
in shares or in cash. The earn-out only falls due if sales exceed the plan that
forms the basis of the acquisition calculation. Vitrolife estimates that the
acquisition will be completed during November 2014.

Investor and press conference
Vitrolife will hold a telephone conference on Thursday November 6 at 10.00 a.m.
in connection with the release of the interim report. The acquisition will also
be presented on this occasion. The telephone conference will be led by the CEO,
Thomas Axelsson, and the CFO, Mikael Engblom. See the company’s website for
further details concerning the telephone conference. The acquisition will also
be presented at the company’s Capital Markets Day on November 6.

Gothenburg
November 5, 2014
VITROLIFE AB (publ)
Thomas Axelsson, CEO
Queries should be addressed to:

Thomas Axelsson, CEO, tel 46 31 721 80 01

Mikael Engblom, CFO, tel 46 31 721 80 14

Vitrolife is required to publish the information in this press release in
accordance with the Swedish Securities Market Act and/or the Financial
Instruments Trading Act. The information was submitted for publication on
November 5, 2014 at 08:30 a.m.

This is a translation of the Swedish version of the press release. When in
doubt, the Swedish wording prevails.
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Vitrolife (http://www.vitrolife.com/en/Corporate/) is an international medical
device Group. Vitrolife Fertility (http://www.vitrolife.com/en/Fertility/)
product area develops, produces and markets medical devices for assisted
reproduction. Work is also carried out to enable the use and handling of stem
cells for therapeutic purposes

Vitrolife (http://www.vitrolife.com/en/Corporate/) has approximately 240
employees and the company's products are sold in almost 110 markets. The company
is headquartered in Gothenburg, Sweden, and there are also offices in USA,
Australia, France, Italy, United Kingdom, China, Japan, Hungary and Denmark. The
Vitrolife share (http://www.vitrolife.com/en/Corporate/Financial/The-share1/) is
listed on NASDAQ OMX
Stockholm (http://www.nasdaqomxnordic.com/aktier/shareinformation?Instrument=SSE
1 
3469), Small Cap.

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Vitrolife AB (publ), Box 9080, SE-400 92 Göteborg, Sweden. Corporate identity
number 556354-3452. Tel: 46 31 721 80 00. Fax: 46 31 721 80 99. E-mail:
info@vitrolife.com. Website: www.vitrolife.com/