Windfalls for brothers who started drug testing firm

By Lunar Loops · Sep 6, 2007 ·
  1. Lunar Loops
    There's money in them there tests.

    This taken from The Guardian (UK):

    Windfalls for brothers who started drug testing firm

    Marianne Barriaux
    Thursday September 6, 2007

    The two founders of Cozart, a company that tests Emirates pilots for drug and alcohol abuse, are poised to make just under £9m each as they sell the firm to Concateno, another Aim-quoted company, for £64.4m.
    Two brothers, Chris and Philip Hand, established Cozart in 1993 with £15,000, and floated it on Aim in 2004, valuing the company at £27m. They both own 14% stakes in the firm which has contracts with organisations like the Home Office to test those detained in police custody for cocaine and heroin. The firm yesterday posted a near four-fold increase in full year pre-tax profit to £1.1m.
    Chris Hand, currently Cozart's chief executive, said he would put 20% of his shareholding back into Concateno, which means he will effectively get around £7m from the sale. He said he and his brother, the chief operating officer, were committed to staying on. He will join Concateno as a non-executive director.

    Concateno, whose £64.4m cash offer is at a 41% premium to Cozart's closing share price on Monday, said that one of the key attractions was Cozart's testing devices, which allow people to be tested on the spot and to get a result straight away.
    The group, which tests British Airways' pilots and stewards for drug and alcohol abuse, as well as London Underground drivers and prisoners around the UK, already has 52% of irrevocable undertakings to accept the offer, and needs a total of 75% acceptances.
    Fiona Begley, its chief executive, said the drug and alcohol testing market was fragmented, with no dominant player, adding there was growing demand for workplace testing as legislation and fear of litigation increase.
    The practice of testing employees in the workplace began in earnest in the US in the early 1990s after the Exxon Valdez disaster in 1989, when an oil tanker owned by the US company hit a reef in Alaska and spilled around 11m gallons of crude oil into the sea - one of the largest spills in US history.
    The captain of the ship was accused of having been drunk, although he was later cleared of this charge. But Exxon promptly introduced drug and alcohol testing. The rail industry in Britain is heavily involved in workplace drug and alcohol testing after the 1991 Cannon Street railway disaster in London which resulted in two deaths and 200 injuries.

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