ASX small cap Purifloh jumps 300 per cent after US billionaire backing

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ASX listed small cap water and air purification technology company Purifloh has jumped more than 300 per cent in the last week, thanks to a $9.6 million investment from a US billionaire.

Upjohn Laboratories, the family investment company of billionaire Michigan-based businessman William ‘Bill’ Parfet, bought up 16.8 per cent of the company, buying 4 million shares at $2.40 per share, representing a 380 per cent premium to its last trading price on Wednesday.

Purifloh executive director Steve Annear said the discussions with Mr Parfet centred on the value of the technology, not the current trading price of the business.

“Bill wanted to assess Purifloh’s value more so than any premium being paid to where it’s trading in the market, none of us paid much attention to that,” he told The Australian Financial Review.

“We’ve been focused on establishing the value of the technology, rather than thinking about how to react to a market that values you at 20¢ or 50¢. We didn’t see that as relevant.”

 

The company, which listed in late 2010, is developing a suite of applications in conjunction with US firm Somnio Global that target air purification, water sanitisation and medical facility sterilisation.

Its free radical generator (FRG) technology produces hydroxyl radicals and ozone, which are highly reactive and known for their sterilisation and purification properties. The company is planning to work with manufacturers to have its technology embedded in existing water and air purification systems.

On the back of the announcement on Wednesday, the company share price skyrocketed from only 50¢ to more than $2.00. On Friday it closed at $2.05, down from $2.17 it closed at on Wednesday on the back of the announcement.

It was the highest the company has traded since 2013.

Mr Parfet, who worked for his family’s pharmaceutical company Upjohn (later renamed Pharmacia & Upjohn as a result of a merger) for 30 years before Johnson & Johnson bought several of its brands and the remainder of the company was acquired by Pfizer in 2003, will also join the board of Purifloh.

“We have conducted due diligence on Somnio and its range of technologies for some time and we are impressed with the disruptive nature of the FRG technology platform. An investment into Purifloh to execute on its potential was logical,” Mr Parfet said.

The capital raised will fund the establishment of a US office in Michigan, which is where Mr Annear will be based. The company currently does not have a chief executive, instead having Mr Annear and also Simon Lill as executive directors. Mr Lill was focused on corporate affairs and Mr Annear on operations, but they will look to bring on board a CEO when it sets up the US operations.

While the FRG technology is still being commercialised, Mr Annear expected it to be in the market within 12-18 months for air purification. It will be able to be used in a standalone portable unit for in-home use, or be installed in in-duct systems in commercial buildings.

The water sanitisation technology is going through trials at the moment and its initial commercial application is expected to be in swimming pools.

“Perceptually there’s four things we’d like to achieve in the next three years. Job one is the commercialisation of the FRG-based products. We have an enormous opportunity with this technology platform because we believe so strongly in its competitive advantage,” Mr Annear said.

“Number two is that the first operating company in the US is well established, full of great people and making money.

“Number three is that we’ve expanded the FRG-based technology beyond what we’ve discussed … and we’re exploring with our partners and customers other product options. The fourth things is … investing in other tech that does the same thing as FRG and attacks pollution and provides decontamination.”

Reference: https://www.afr.com/technology/asx-small-cap-purifloh-jumps-300-per-cent-after-us-billionaire-backing-20181110-h17r6z

Author: Yolanda Redrup

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