LONDON (ShareCast) - Dermatology firm York Pharma has signed a licensing deal to market two leading wound infection treatments.

The company is paying Solvay Phamaceuticals BV €28.5m (£22.6m) for the current sales and world-wide commercial rights to Flammazine and Flammacerium, two treatments for wound infections.

The brands are currently on sale in 21 countries and produce revenues of about £8.5m a year, with France, Germany, Belgium and Spain the major markets. York plans to grow this revenue through promotional activity and securing authorisation to market the products in additional regions, including North America.

The acquisition will be funded by the proceeds of a £24.2m issue of senior secured non-convertible notes and subordinated convertible debentures.

The loan-note debt will be repayable over five years and carries a coupon of EURIBOR plus 11%, capped at 16%. The debentures have a coupon of 10% and are repayable over five years, either via cash or through the issue and allotment of new ordinary shares.

Further funding of £3.9m has been secured through the placing of 8.9m York shares at 44p each with institutional investors.

As part of the deal Solvay will be providing York with ready-to-sell versions of the product over a period of five years.

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