PerkinElmer Buys Autoimmune Testing Firm for $1.3 Billion

Waltham, MA 6/19/17; Lübeck, Germany 6/19/17—PerkinElmer has signed a definitive agreement to acquire EUROIMMUN Medical Laboratory Diagnostics for $1.3 billion in cash. EUROIMMUN is provider of autoimmune testing, infectious disease and allergy testing products. Based in Germany with 2,400 employees, the company is expected to post revenues of $310 million this year, with China accounting for 45% of sales. “With the acquisition of EUROIMMUN and its talented team of professionals, we are able to leverage our combined advanced detection, imaging and assay development capabilities, along with our strong collective market positions and synergistic commercial activities, to deliver better and more complete solutions to our customers around the world,” commented PerkinElmer Chairman and CEO Robert Friel. The purchase is expected to be accretive to PerkinElmer’s 2018 non-GAAP EPS by $0.28–$0.30.

The acquisition in expected to close in the fourth quarter, according to an analyst call discussing the deal. As Mr. Friel highlighted in the call, specialty diagnostics testing, especially in emerging markets, has been a focus and source of growth for PerkinElmer in recent years. Acquisitions in this area included Tulip Diagnostics (see IBO 1/15/17) and Shanghai Haoyuan Biotech (see IBO 11/15/12). EUROIMMUN expands PerkinElmer’s test menu and technology offerings for a number of markets. Going forward, PerkinElmer continues to expect its diagnostics business to account for 50% of revenues, according to the call.

Regarding the companies’ commercial synergies, Mr. Friel stated on the call, “For example, EUROIMMUN enables expansion into the nearby adjacencies within reproductive health, including sexually transmitted diseases, HPV and infectious disease, while increasing PerkinElmer’s ability to offer an extensive menu and more complete solutions to our customers.” Two-thirds of EUROIMMUN revenues are from autoimmune sales, and 20%–25% are from infectious disease testing, according to the call. The acquisition will be funded by cash and incremental debt. PerkinElmer expects ROIC from the purchase of more than 10% by year five. This year, EUROIMMUN is expected to record EBITDA of $70 million.

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