Transaction Increases 2002 Pro Forma Revenues to Approximately $20 Million
LOS ANGELES, Dec. 11 /PRNewswire-FirstCall/ -- Health Sciences Group, Inc. (OTC Bulletin Board: HESG), an integrated provider of innovative products and services to the nutraceutical, pharmaceutical, and cosmeceutical industries, announced today that it had signed a definitive agreement to acquire substantially all of the assets and business of Quality Botanical Ingredients, Inc. (QBI). QBI is a leading purchaser, manufacturer and contract processor of bulk botanical materials and nutritional ingredients supplied to buyers in the pharmaceutical, nutraceutical and cosmetic industries. On a pro forma basis, annualized consolidated revenues are expected to total $20 million for 2002.
"The acquisition of QBI should be the catalyst for our rapid growth," said Fred E. Tannous, Co-chairman and CEO of Health Sciences Group, Inc. "We believe that there are tremendous synergies between our companies and we expect this acquisition to form a solid foundation for further expansion. We plan to leverage QBI's position in the market and its experienced management team to grow internally in addition to making additional accretive acquisitions."
"We are pleased to become part of the Health Sciences growing family of companies," commented Joe Schortz, Chief Executive Officer of QBI. "We see a tremendous opportunity to combine QBI's reputation for quality products with the infrastructure and resources provided by Health Sciences. With strategic guidance, operational support and additional resources, we are confident that we can expand QBI's operations to create an impressive nutraceutical company, offering exceptional products to a growing list of customers." Mr. Schortz is expected to sign a three-year employment agreement with QBI.
Bill Glaser, President and Co-chairman of Health Sciences said, "We are pleased to have entered into this agreement with QBI, which has a strong reputation in the nutraceutical industry and in particular the nutritional supplements market. We believe we can leverage QBI's operational capabilities and industry networks in expanding our business to meet the growing demand for functional foods and beverages, such as energy bars and sports drinks, a burgeoning sector of the nutraceutical industry." QBI is expected to operate as a wholly owned subsidiary of Health Sciences Group, Inc.
Health Sciences Group, headquartered in Los Angeles, California, currently employs 22 individuals and operates two wholly owned subsidiaries, XCEL Healthcare, Inc. and BioSelect Innovations, Inc. Upon completion of the acquisition, the Company will increase its workforce to over 100 employees and extend its presence to South Plainfield, New Jersey, the location of QBI's operations. The transaction is subject to customary closing conditions, including the satisfaction of conditions for the buyer's debt financing and the buyer's closing on additional equity financing commitments.
About Health Sciences Group, Inc
Health Sciences Group, Inc. is an integrated provider of innovative products and services in the nutraceutical, pharmaceutical, and cosmeceutical industries offering value-added ingredients, bioactive formulations, and proprietary technologies used in nutritional supplements, functional foods & beverages, and skin care products. The Health Sciences Group family of companies is currently comprised of XCEL Healthcare, Inc., a fully licensed, specialty compounding pharmacy focused on delivering full service pharmacology solutions to customers with chronic ailments that require long-term therapy; and BioSelect Innovations, Inc., which develops and sells high-margin products based on its proprietary technologies in the areas of transdermal drug delivery, cosmeceuticals, and integrative medicine to a global network of customers who manufacture and distribute compounded pharmaceuticals, functional foods, skin care products and cosmetics. Quality Botanical Ingredients, Inc. is a leading purchaser, manufacturer and contract processor of bulk botanical materials and nutritional ingredients supplied to buyers in the nutraceutical, pharmaceutical, and cosmetic industries.
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934 that are based upon current expectations or beliefs, as well as a number of assumptions about future events. Although the Company believes that the expectations reflected in the forward-looking statements and the assumptions upon which they are based are reasonable, it can give no assurance that such expectations and assumptions will prove to have been correct. The reader is cautioned not to put undue reliance on these forward-looking statements, as these statements are subject to numerous factors and uncertainties, including without limitation, the independent authority of the special committee to act on the matters discussed, the successful negotiation of the potential acquisition and disposal of transactions described above, successful implementation of the company's business strategy and competition, any of which may cause actual results to differ materially from those described in the statements. In addition, other factors that could cause actual results to differ materially are discussed in the Company's most recent Form 10-QSB and Form 10-KSB filings with the Securities and Exchange Commission.