Affymetrix Diversifies with eBioscience Purchase
According to an Affymetrix conference call presentation, eBioscience will account for 24% of Affymetrix’s pro forma 2012 revenues. Reasons cited by Affymetrix for the acquisition included the expansion of its addressable markets into higher growth markets, such as flow cytometry and functional proteins, the ability to offer a broader spectrum of reagents and that the purchase complements Affymetrix’s clinical business. According to Affymetrix, eBioscience is the second-largest provider of flow research reagents, with an 11% market share. EBioscience’s compound annual growth rate from 2009 to 2011 is estimated to be 13%. The acquisition is expected to expand Affymetrix’s gross margins by around 250 basis points and increase its cash flow. The transaction will be accretive to Affymetrix’s non-GAAP EPS in 2013. Headquartered in San Diego, California, eBioscience has 280 employees.
Santa Clara, CA 11/30/11—Affymetrix has agreed to acquire eBioscience for $330 million in cash. EBioscience is a provider of flow cytometry and immunoassay reagents for immunology and oncology research and diagnostics, with estimated 2011 sales of more than $70 million. The company has gross margins of over 70% and an EBITDA margin of 30%. “With eBioscience, Affymetrix will significantly expand its addressable markets by adding an industry-leading portfolio of cell-based and immunoassays,” said Dr. Frank Witney, president and CEO of Affymetrix. “These new products are a critical part of our customers’ workflow in our key target markets of translational medicine, oncology and immunology. We believe that these markets represent a nearly three-billion-dollar annual opportunity, which will put Affymetrix on a solid path to sustained growth and profitability.” The acquisition will be funded by 50% cash on hand and 50% committed debt. The transaction is expected to close late in the fourth quarter.
