Repligen Merges with Filtration Firm

Waltham, MA 6/23/17—Bioprocessing technology firm Repligen has definitively agreed to acquire Spectrum, a diversified filtration company, for $359 million, consisting of $120 million in cash and 6,154,000 shares. Spectrum products include hollow fiber cartridges, benchtop commercial-scale filtration and perfusion systems, and single-use solutions. In 2016, it generated revenues of $40.2 million. “This is a pivotal transaction for Repligen that meets all of our acquisition criteria and is a major step forward in building Repligen as a global leader in bioprocessing and achieving our long-term financial goals,” stated Repligen President and CEO Tony J. Hunt. Spectrum is anticipated to contribute $17–$18 million to Repligen’s 2017 sales, and to add $47–$50 million to 2018 sales. The purchase is expected to be breakeven to adjusted EPS in 2017 and accretive in 2018. Over three years, synergies are estimated to total $20–$25 million, including $15–$20 million in revenue synergies. The transaction is scheduled to close in the third quarter.

Repligen’s core business is Protein A affinity ligands, which are sold to GE Heatlhcare and MilliporeSigma. In recent years, the company has expanded its bioprocess chromatography and filtration business. In 2016, 41% of revenue (assuming the full-year revenues of TangenX [see IBO 12/31/17] and Spectrum] came from filtration, with chromatography representing 20% and proteins the remainder. The acquisition doubles Repligen’s filtration product offerings and adds filtration consumables, according to a company analyst call. Repligen stated that the acquisition increases its addressable markets from mABs to vaccines, recombinant protein and gene therapy. It also adds to the company’s commercial organization and infrastructure, including a direct sales presence in Asia. Spectrum products address both upstream and downstream applications.

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