SQI Diagnostics to Acquire Scienion AG, a Leader in Microarray Manufacturing

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TORONTO, July 4, 2011 /CNW/ - SQI Diagnostics Inc. ("SQI" or the "Company") (TSX-V: SQD), a life sciences company that develops and commercializes proprietary technologies and products for advanced microarray diagnostics, today announced that it has entered into an agreement to acquire all of the share capital of Scienion AG, a German-based microarray manufacturing equipment and microarray print and development services company for a purchase price of CDN$15 million in cash and the issuance of 735,294 common shares in the capital of SQI.

SQI believes Scienion is a market leader in microarray printing development, microarray production systems and contract microarray print and development services for the life sciences industry. The Company's proposed acquisition of Scienion will further the Company's entry into the market for providing enabling technologies for multiplexed protein, antibody, antigen and molecular (genetic) microarrays.

Specifically, the Company believes that the proposed acquisition will:

• enable it to combine its assay commercialization leadership, its range of cleared and in-development processing and analytical systems for running microarray tests and the expertise of the two companies for highly technical microarray printing capabilities;
• strengthen the Company's technology leadership position in microarray printing, surface chemistry, and automation of microarray processes;
• accelerate the commercialization of the Company's pipeline of in vitro diagnostic products through the use of Scienion's arrayer equipment and complete "print solution"
• provide the Company with access to Scienion's base of more than 400 customers, many of whom are potential customers for the Company's service offerings and research use only and in vitro diagnostic products;
• provide sales support for Scienion's equipment, products and services in North America;
• give the Company access to Scienion's sales and engineering support foothold to leverage the Company's suite of diagnostic products and services in Europe; and
• diversify the Company's revenues and add financial strength: annual revenues for Scienion were over CDN$5 million for the fiscal year ended December 31, 2010 with approximately CDN$400,000 in earnings before interest, taxes, depreciation and amortization.

The closing of the transaction is subject to a number of customary closing conditions and regulatory approvals, and is subject to financing.  The parties to the transaction include: Peppermint Holding GmbH; Peppermint Venture Capital GmbH & Co. KG; Max-Planck-Gesellschaft zur Förderung der Wissenschaften e.V.; S-Venture Capital Dortmund GmbH; NRW.BANK Venture Fonds GmbH & Co. KG; IBB Beteiligungsgesellschaft mbH; KfW, Anstalt des öffentlichen Rechts; VC Fonds Berlin GmbH; S-Capital Dortmund GmbH & Co. KG; and certain other individuals.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities to be offered may not be offered or sold within the United States absent registration under the United States Securities Act of 1933, as amended, and applicable state securities laws, or pursuant to an applicable exemption from the registration requirements thereof.

About Scienion
Scienion AG provides systems and services for the contact-free printing of biological and chemical agents for human diagnostics, pharmaceutics, veterinary, plant and food analytics and research. Scienion provides flexible off the shelf solutions for research and development and customized solutions for production purposes. Scienion has leading technology in the area of ultra low volume liquid handling, particularly for the handling of precious and sensitive compounds of biological or chemical origin. Scienion's dispensers allow for contact-free and precise drop spotting in the pico- to nano-liter range and are suited for microarray based analytics - as for tests with DNA, oligonucleotides, peptides, proteins, antibodies, glycans or for dispensing cells onto various carriers. For more information, please visit www.scienion.de. The contents of the website are specifically not incorporated by reference in this press release.

About SQI Diagnostics
SQI Diagnostics is a life sciences company that develops and commercializes proprietary technologies and products for advanced microarray diagnostics.  The Company's proprietary microarray tests and fully-automated systems are designed to simplify protein and antibody testing workflow, increase throughput, reduce costs and provide excellent data quality.  For more information, please visit www.sqidiagnostics.com. The contents of the Company's website are specifically not incorporated by reference in this press release.

FORWARD-LOOKING INFORMATION
This press release contains certain forward-looking statements, including, without limitation, statements containing the words "may", "plan", "will", "estimate", "continue", "anticipate", "intend", "expect", "in the process" and other similar expressions which constitute "forward-looking information" within the meaning of applicable securities laws. Forward-looking statements reflect the Company's current expectation and assumptions, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These forward-looking statements involve risks and uncertainties including, but not limited to, our expectations regarding the completion of the proposed acquisition of Scienion AG, including obtaining the necessary financing and regulatory approvals, assuming the completion of the proposed acquisition, the integration of the businesses of SQI and Scienion, the Scienion business being less profitable than expected, potential undisclosed liabilities associated with the proposed acquisition, exchange rates fluctuations and interest rates fluctuations, general economic and market segment conditions, competitor activity, technology changes, regulatory approvals and international risk and currency exchange. More specific risks include that SQI management will not be able to integrate the two businesses, or that the entities will not realize some or all of the expected synergies set out above or other synergies expected by management due to incompatibilities in the merging business, the inability of management to bring about such synergies or a changing business environment rendering such synergies inadvisable or uneconomical. After integrating the businesses, the suite of product and service offerings may not perform as expected if shifting demand moves in a direction away from the expected business model of the merged entity, if competitors are able to take market share away from the merged entity or if changing technology adversely impacts the merged businesses. In addition, while the Company expects Scienion's customers to continue and expend their relationship with the merged entity, there can be no assurance that such relationships will continue as expected, if at all. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks and uncertainties and other risks detailed from time-to-time in the Company's ongoing filings with the securities regulatory authorities, which filings can be found at www.sedar.com. Actual results, events, and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise, except as required by applicable securities laws.

DEFINITION OF NON-GAAP MEASURES: EBITDA
This announcement contains reference to EBITDA. This measurement represents operating income before depreciation, amortization, interest, income taxes and non-controlling interest. This measurement is a widely accepted financial indicator of a company's ability to service and incur debt. It should not be considered as an alternative to operating income or net earnings, as an indicator of operating performance or cash flows, or as a measurement of liquidity, but as additional information. Because EBITDA is not a measurement defined by generally accepted accounting principles in Canada or Germany, it may not be comparable to the EBITDA of other companies.

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