A new face for Ambri

A brave new era has begun for former medical technologies company Ambri, which is set to make its return to the stock exchange on Friday under the new name Diversa (Code: DVA)

The return of Ambri, under its new guise, has come about with its acquisition of a new business -- the famous NSW Bookmakers Superannuation Fund.

Last week Diversa closed its offer prospectus after having raised $4.4 million through the issue of 22 million shares at 20 cents each. The company also completed the acquisition of the company that runs the Bookmakers Super Fund for $6.15 million in cash over two years and a minimum of $800,000 in Diversa shares.

The Bookmakers was once one of Australia's top performing funds with returns of over 10 per cent each year since it began in 1974 except for a few years following the previous recession (returns shrank to a low of 8.1 per cent in 1994) plus to 8 per cent returns in 1997-98 and 2001-02. Yet last year the fund suffered a serious blow, down 16.2 per cent for the 2007-08 financial year.

The business was also hurt by its significant exposure to structured mortgage products and companies like the collapsed property group MFS (now known as Octaviar). The tactics may have worked for Bookmakers in the credit boom, but fell flat on its face as the credit crunch set in. It is not known what the fund's more recent performance has been as it is not unitised.

The fund's manager, Super Promoters, nevertheless made a net profit of $1.4 million in the 12 months to June 30 last year on revenues of $2 million. As at December 31, the fund had 2,056 members and $215 million of total funds under management. The vast majority of Super Promoters' revenues came from management fees set at 0.8 per cent.

The capital raising to fund Diversa's initial payments were underwritten by Bizzell Capital Partners, whose principal Stephen Bizzell is co-founder and executive director of Arrow Energy. Diversa is set to pay Bizzell a 5 per cent underwriting fee plus 6 million options as well as a 1 per cent management fee for all funds raised and a 5 per cent capital raising fee for amounts raised in excess of the underwritten amount.

Bizzell Nominees currently owns 3.46 per cent of Diversa and Bizzell Capital Partners owns a further 1.7 per cent. Companies associated with past and present directors also have significant stakes in Diversa. The company's board is presently composed of Queensland BioCapital Fund executive Matt Morgan, Greg Baynton, who runs corporate advisory firm Orbit Capital, and Macquarie Group's mortgages boss Tim Brown.

However, Ambri/Diversa's acquisition is just the latest stage in a long and storied saga .

Ambri listed in 2000 for $32 million – the largest biotech IPO in Australia at the time – and became a hot stock after September 11, when traders started betting on the applicability of the company's technology for germ warfare defence. However, the former Ansell spin-off's fortunes began to stumble when, amid production delays, its prominent chief executive Dr Joe Shaw, who had once called for CSIRO to be made a Crown corporation and be partially floated on the ASX, left on March 25.

As it happened, the United States had invaded Saddam Hussein's Iraq five days before Shaw's departure, looking for chemical and biological weapons. But just as no such weapons of mass destruction were found, investors had lost their enthusiasm for Ambri's ever-delayed biosensor technology. After missing several major development milestones and experiencing serious budget overruns Ambri started to scale down its operations.

Over the last few years Ambri has made a number of biotech investments and licensing deals, but its entry into the world of superannuation represents a completely new direction, not that diversifications such as Diversa's are particularly odd for the industry.

Plasma group Life Therapeutics recently invested $2.5 million in oil and gas explorer Modena Resources. Life Therapeutics was last year taken over by Neutral Bay businessman Michael Milne, best known for introducing Demtel's famous steak knives to Australia and for being charged over laundering $30 million in Operation Wickenby.

Last month Stirling Products, a biotech developing "animal growth promotion agents", announced it would take a stake in Zodiac Capital, which once planned to take over Sydney broker Findlay Securities.

Stranger things have happened at the lab, as Dr Frankenstein might have said.