The analytical and life science instrument industry has a new number one company. As a result of the acquisition of Fisher Scientific in November 2006 (see IBO 11/15/06), Thermo Fisher Scientific overtook Applied Biosystems in 2007 to become the world’s largest provider of analytical and life science instruments and aftermarket products, based on IBO’s calculations. In general, rapid sales growth and consolidation helped the top 30 companies further increase their share of the total market last year. In 2007, the total revenues of the top 30 companies grew 10.2% to represent 69.1% of analytical and life science instrument and aftermarket sales (see IBO 1/15/08).

Analytical and life science instruments are defined by the nine product categories detailed in IBO’s annual forecast issue (see IBO 1/15/08) (atomic spectroscopy, general analytical techniques, laboratory automation, life science techniques, mass spectrometry, materials characterization, molecular spectroscopy, separation techniques, surface science). Rankings are based on each company’s calendar-year sales as calculated in dollars for the nine categories and include sales of initial systems, as well as related aftermarket and service revenues. Excluded are laboratory equipment (products that do not sense a sample characteristic), process analytical instrumentation (products physically integrated into a production line) and related aftermarket items, as well as products used exclusively in clinical diagnostics applications.

Thermo Electron’s acquisition of Fisher Scientific added sizable businesses in laboratory chemicals and reagents, as well as consumables and outsourcing services, that propelled the company to the number one position on the top 30 list. Other major movers were Merck KGaA and Roche. Merck KGaA’s instrument business consists of lab chemicals, life science reagents and LC columns, which are sold by Merck’s Life Science Solutions and Biosciences units. Merck moved up 10 spots from last year to number 14 due to a revised estimate of its sales by IBO. A revised estimate by IBO of Roche’s Applied Science business has also boosted that company’s ranking. Roche moved up eight spots from last year to number 18.

The sole new entry to the top 30 this year is MDS at number 27. The company replaces Fisher Scientific, which was number 27 last year. MDS’s purchase last year of Molecular Devices (see IBO 1/31/07) added annual sales of $186.4 million to its existing instrument business, MDS Sciex. MDS completed the acquisition in March 2007, thus its revenues as listed in the top 30 includes approximately nine months of sales.

The top five fastest growing companies in 2007’s top 30 were Bruker (20.9%) (see page 9), Agilent Technologies (18.4%), QIAGEN NV (18.0%), Becton Dickinson (16.8%) and Waters (15.1%). Although each of these five companies made small acquisitions related to their analytical instrument businesses last year, Agilent was the only company whose sales were significantly increased by an acquisition, specifically, its acquisition of Stratagene (see IBO 4/15/07) in June 2007. Stratagene had 2007 sales of $95.6 million, excluding a one-time payment.

One factor for three of the top five fastest growing companies was currency. US-based Agilent, Becton Dickinson and Waters benefited from a low US dollar, which helped drive sales abroad. Nonetheless, the five companies posted impressive sales growth last year. Contributing to these companies success were leading positions in growing markets, robust overseas sales and new products.

However, these five companies’ double-digit growth rate was not unique among the top 30. Overall, 12 of the top 30 companies recorded double-digit revenue growth in 2007. On average, revenues grew 9.0% in 2007 for the top 30, two percentage points above the industry’s total growth rate in 2007 (see IBO 1/15/08), indicating that the industry’s largest companies are among its fastest growing.

Among the top 30 companies, the five slowest growing companies in 2007 were Hitachi High-Technologies (-0.3%), Beckman Coulter (2.3%), Carl Zeiss (3.6%), Tecan (3.9%) and Affymetrix (4.5%). Notably, three of the five companies—Beckman Coulter, Tecan and Affymetrix—are life science instrument companies that faced increased competition and tougher market conditions in the US last year.

On a regional basis, North American companies accounted for 68% of the top 30 companies’ more than $24.2 billion in revenues last year. Europe and Asia-Pacific companies accounted for 18% and 14% of sales, respectively. The top European company is Bruker, which is listed on the US stock market but the majority of its shareholders are German. Of the nine European companies, five are German and two are Swiss.

In defining the types of companies that made up this year’s top 30, IBO chose three categories: broad-based companies, which sell instruments and related products across a wide range of product categories; life science companies, which sell products for the analysis of biological samples; consumables companies, whose majority of sales consist of consumables products; and microscopy companies, whose only analytical technique they sell are microscopes. Fourteen of the top 30 companies are defined as broad based, including six of the top 10. These companies accounted for 63% of the top 30 companies’ revenues last year. Eight companies (Applied Biosystems, GE, Becton Dickinson, Beckman Coulter, Roche, Bio-Rad Laboratories, Eppendorf and Tecan) are defined as life science companies and represented 27% of the top 30’s 2007 revenues. The five consumables companies (Invitrogen, Sigma-Aldrich, Merck KGaA, QIAGEN, and Affymetrix) represented 13% of the top 30 companies’ 2007 revenues. The three microscopy companies (Olympus, Nikon and Carl Zeiss) accounted for 6% of revenues.