With the pickup in global merger and acquisitions activity this year, certain segments of the lab products market have gained new attention. Specifically, two companies providing specialty chemicals for lab research, such as reagents, buffers, acids and HPLC solvents, have attracted new owners, which hope to capitalize on specialty applications, geographic expansion and the increase in testing volumes.

Private equity firm New Mountain Capital completed its acquisition of Mallinckrodt Baker from Covidien in August for $280 million (see IBO 5/31/10). In addition to its Laboratory and Research division, Mallinckrodt Baker also consists of the Pharmaceutical and Biopharmaceutical and the Microelectronics and Photovoltaic divisions. The company reported 2009 revenues of $414 million and has 1,100 employees. According to Paul Smaltz, vice president of Global Marketing, the Laboratory and Research unit accounts for approximately one-third of Mallinckrodt Baker revenues. A new company and brand name will soon be introduced to replace the Mallinckrodt name, which will continue to be used by Covidien.

Mr. Smaltz told IBO, “The laboratory market will remain as one of the key areas for our business, especially as output and accuracy demands keep increasing at a rapid rate in high-performance specialty instrumentation.” He added, “Now that we’re a stand-alone entity, with the support of New Mountain, we’ll consider opportunities to grow both organically and through acquisition to support these goals.” These opportunities include geographic and market expansion. “The resources and corporate commitment that we now have through New Mountain will allow Mallinckrodt Baker to grow to the forefront of materials technology,” Mr. Smaltz explained. “To achieve our growth strategy, we will also look at opportunities to explore expansion into new territories. Particular areas of interest include India, China and Eastern Europe. Our goal is to expand into complementary markets to gain a larger percentage of the overall spend in the lab business.” The business’s key markets are pharmaceutical, biotech, academic and microelectronic labs. “Our strength in the lab market is in lab reagents—especially in high-purity solvents. Over the years, and continuing today, we have invested a lot toward research and development in that area,” said Mr. Smaltz.

The other recent lab chemical acquisition is Illinois Tool Work’s (ITW) purchase of Spanish firm Panreac Quimica SA (see page 2). This is ITW’s entry into the lab chemical market, although its Polymers and Fluids division provides a wide range of specialty chemicals for industrial applications. Panreac offers more than 12,000 products, including reagents, HPLC solvents, fine chemicals, food chemicals, microbiology growth media and histology products. Its products are available in over 80 countries, and it has subsidiaries in Italy, France and Portugal. Panreac also serves as a lab product distributor.

Announcing the acquisition, ITW described the deal as providing it with access to the European fine chemicals market. Panreac Managing Director Joan Roget stated that ITW was “the ideal partner for initiating the consolidation of this sector, which will enable us to provide a wider coverage and better service to our customers.”