After several years of sizable transactions, merger and acquisition (M&A) activity in the instrument and laboratory product–related industry was restrained in 2012. The combined value of the top five largest pure-play acquisitions amounted to $2.2 billion in 2012, compared with an average of $7.2 billion over the previous five years. However, the absence of any landmark deals was overshadowed by several acquisitions targeting cell workflows and analysis, as well as by acquisitions that solidify market positions.

IBO’s annual summary of M&A in the analytical instrument and laboratory product–related markets is comprised of deals announced in IBO between November 15, 2011, and November 15, 2012. The article and tables are based on publicly available information.

Two of this year’s notable M&A transactions were evidence of consolidation. Corning Life Sciences’ acquisition of Becton Dickinson’s (BD) Discovery Labware business for $730 million (see IBO 4/15/12) significantly expanded its Life Sciences segment in the laboratory consumables market, especially in India, Korea and Japan. The acquired assets, which consisted of liquid handling products, cell culture products, biologically coated plastic consumables, cell culture reagents and ADME research tools, increased segment sales by 40%. This acquisition supports Corning’s goal to achieve $1 billion in sales for the Life Sciences segment by 2014. The deal also faced US regulatory scrutiny regarding sales of cell culture labware, creating an opportunity for Sigma-Aldrich (see IBO 10/31/12).

Similarly, Hitachi-High Technologies’ proposed acquisition of Seiko’s SII NanoTechnology business faces regulatory scrutiny (see IBO 5/31/12, 8/15/12), as it is expected to expand Hitachi High-Technologies’ scanning electron microscopy and atomic spectroscopy businesses. By acquiring product lines in these areas as well as for materials characterization, the company will be able to provide multiple techniques that complement each other for areas such as materials research and pharmaceutical research. Hitachi High-Technologies also joins a select list of suppliers that can offer multiple product lines for atomic spectroscopy and surface science techniques.

Acquisitions by Bruker and Agilent Technologies also resulted in consolidation in smaller markets. Bruker strengthened its technology portfolio for in vivo animal imaging, acquiring additional modalities through the purchases of Skyscan (see IBO 4/15/12) and selected assets of Carestream Healthcare (see IBO 9/30/12). Agilent acquired Halo Genomics (see IBO 12/15/11), adding to its product line for target enrichment for next-generation sequencing sample preparation.

As for analytical techniques for which there were multiple acquisitions over the last year, flow cytometry was particularly popular. Beckman Coulter (Danaher) (see IBO 3/31/12), Bio-Rad Laboratories (see IBO 10/31/12) and Brooks Automation (see IBO 4/15/12) each made investments. This activity follows last year’s flow cytometry acquisitions by BD (see IBO 2/15/11) and Merck Millipore (see IBO 8/31/11). In addition, BD and Affymetrix acquired flow cytometer reagent companies. BD acquired start-up company Sirigen, which offers new reagent technology (see IBO 8/31/12). Affymetrix purchased eBioscience (see IBO 6/30/12), which provides reagents for both cell and protein analysis. Also investing in cell-based analysis techniques was Life Technologies with its purchase of Advanced Microscopy (see page 2).

Affymetrix’s purchase of eBioscience was also an effort by the company to diversify its product lines and end-user markets to offset declining sales in its Gene Expression business. Other companies also diversified their product offerings through acquisitions. Danaher continued to build its portfolio of analytical instrument techniques, adding X-ray fluorescence spectroscopy with the purchase of XOS (see IBO 2/15/12) and colorimetry with the acquisition of X-Rite (see IBO 4/30/12). German firm Verder expanded its Laboratory business beyond sample preparation, adding elemental analyzer systems through the acquisition of ELTRA (see IBO 5/15/12) and laboratory products with the purchase Carbolite (see IBO 7/15/12). Pall added label-free technology to its line of laboratory products with the purchase of ForteBio (see IBO 12/31/11).

The growth of the cell research and biologics markets was exhibited in purchases that expanded the cell culture media and reagent businesses of two major bioscience consumables suppliers. Corning acquired Mediatech (see IBO 12/15/11), giving it a complete line of products and custom solutions for all stages of cell culture growth and scaling. Merck Millipore acquired Biochrom (see IBO 8/31/12), which added to its cell culture media and buffer products.

The high-growth area of service also attracted interest. Sigma-Aldrich expanded its custom manufacturing and services business unit with the purchase of BioReliance (see IBO 1/15/12), vertically integrating its products and service solutions for the development and manufacturing process for pharmaceutical, biopharmaceutical and diagnostics. Also, Thermo Fisher Scientific acquired Doe & Ingalls Management (see IBO 5/15/12), expanding its fast growing pharmaceutical services business downstream to manufacturing.

Companies also continued to acquire firms in order to expand their presence in emerging markets and new territories. Targeting the Chinese market, Life Technologies purchased Beijing Maojian United Star Technology (see IBO 8/15/12); Danaher’s Hach business acquired Hangzhou Dingli Environmental, one of its Chinese distributors; and Roper Industries’ Dynisco subsidiary bought Shanghai Hao Ying Measurement and Control Technology (see IBO 4/15/12). Instron’s purchase of EMIC (see IBO 8/15/12) and VWR’s acquisition of Sovereign (see IBO 9/15/12) focused on South America. Companies also expanded their geographic reach by purchasing foreign distributors, including FEI in South Korea (see IBO 7/15/12), Waters in Israel (see IBO 6/15/12), and STARLIMS in multiple regions (see IBO 3/15/12, 10/15/12).

Multiple companies also divested product lines and businesses this year, reconfiguring operations to focus on higher growth markets. In addition to BD, other companies shedding businesses included Pall, which sold certain assets of its blood collection, filtration and processing product line to Haemonetics; Bruker, which divested its Japanese thermal analysis instrument business (see IBO 9/15/12); Thermo Fisher Scientific, which divested its laboratory workstations business (see IBO 6/30/12); and Merck Millipore, which sold a microbiological contract lab (see IBO 5/15/12).

For other firms, the changes were more dramatic. Roche closed down its NimbleGen DNA microarray product lines (see IBO 6/15/12) and sold its Cellavista Imaging System product line (see IBO 10/31/12), indicating a reset for part of its Applied Science business. These moves followed the company’s failed bid for Illumina (see IBO 4/30/12). SDIX’s divestment of its Water Quality (see IBO 12/15/12) and Food Safety and GMO businesses (see IBO 10/15/12) indicated a change in strategy for the company and focus on its life science business.

Finally, it was another year of sizable diagnostic acquisitions, with several of the purchases marking a major commitment by analytical instrument providers to the molecular diagnostics market. Agilent entered the immunohistochemistry market with the acquisition of Dako for $2.2 billion (see IBO 12/15/12). Life Technologies’ string of diagnostic purchases (see IBO 7/31/12, 10/15/12) also announced its strategy in the market. Continuing to expand in the market were Danaher, whose Leica Biosystems business bought digital pathology company Aperio Technologies, while Beckman Coulter acquired IRIS International for $338 million, expanding its line of in vitro diagnostic tests and systems. Thermo continued to expand its specialty diagnostic business, buying One Lambda (see IBO 7/31/12). PerkinElmer added to its Chinese diagnostic presence with the purchase of Shanghai Haoyuan Biotech (see page 2), while Luminex acquired GenturaDx to gain PCR hardware (see IBO 7/15/12).

Companies also addressed emerging diagnostic markets. Illumina’s purchase of BlueGnome (see IBO 9/30/12) highlighted the attraction of this market for analytical instrument providers, as Affymetrix, Agilent and PerkinElmer are also market participants. Joining the push for the clinical adoption of next-generation sequencing was QIAGEN, which acquired Intelligent Biosystems’ next-generation sequencing technology (see IBO 6/30/12).

 Five Largest Pure-Play Instrument and Laboratory Product–Related Acquisitions in 2012

 Purchaser       Acquired                         Purchase Price($M)  Acquired Co.'s Annual Sales($M)

 Corning         BD's Discovery Labware business  $730.0              $235.0

 Danaher         X-Rite                           $625.0              $146.0

 Sigma-Aldrich   BioReliance Holdings             $350.0              $120.0

 Affymetrix      eBioscience                      $314.9               $71.0

 Thermo Fisher   Doe & Ingalls Management         $176.3              $110.0

Scientific

 Five Largest Premiums Paid in 2012 for Pure-Play Companies with Sales Over $10 Million 

 Purchaser       Acquired                         Purchase Price($M)  Acquired Co's Annual Sales($M)  Price-to-Sales Ratio

 Abcam           Epitomics                        $170.0                $24.7                         $6.9

 Affymetrix      eBioscience                      $314.9                $71.0                         $4.4

 Danaher         X-Rite                           $625.0               $146.0                         $4.3

 Corning         BD's Discovery Labware business  $730.0               $235.0                         $3.1

 FEI             ASPEX                             $30.5                $10.0                         $3.1

                   

 Five Best Values in 2012 for Pure-Play Companies with Sales Over $10 Million 

 Purchaser       Acquired                         Purchase Price($M)  Acquired Co.'s Annual Sales($M) Price-to-Sales Ratio

 IDEX            ERC                               $21.0                $27.0                         $0.8

 Xylem           MJK Automation                    $12.3                $10.7                         $1.1

 Ahlstrom        Munktell Filter                   $25.0                $21.0                         $1.2

 Thermo Fisher   Doe & Ingalls Management         $176.3               $110.0                         $1.6

 Scientific

 Accelrys        VelQuest                          $35.0                $19.0                         $1.8

 Column Chart: Value of Five Largest Pure-Play Instrument and

 Laboratory Product–Related Acquisitions

        Top 2–4    Top 1

 2010    $1,300   $7,000

 2011    $3,415   $6,800

 2012    $1,466     $730

 Greatest Number of Pure-Play Instrument and Laboratory Product–Related Acquisitions in 2012

 Company Number of Acquisitions

 VWR International         5

 Agilent Technologies      4

 Danaher                   4

 FEI                       4

 Life Technologies         4