OraSure Technologies, which develops and manufactures oral fluid diagnostic devices, is expanding into the molecular diagnostics market with its $53 million cash acquisition of DNA Genotek. OraSure says that the deal will provide it with a complementary portfolio of products that enable collection, stabilization, transportation, and storage of high-quality DNA and RNA samples.
“Our companies share a common capability and passion to develop best-in-class oral fluid-based solutions. Since 2004, DNA Genotek has posted impressive financial revenue growth and profitability, and we fully expect that solid performance to continue," stated Douglas A. Michels, OraSure's president and CEO.
DNA Genotek—which will operate as a wholly-owned subsidiary of OraSure—generated approximately $14 million in total revenues last year. The company says it has been profitable in both operating and net income each of the past four years, during which it has seen “significant” revenue growth.
Based in Ottawa, Canada, DNA Genotek serves more than 3,000 customers in over 100 countries worldwide, including top research universities and hospitals in the U.S. DNA Genotek’s lead product, the Oragene®•DNA sample collection kit, provides an all-in-one system for the collection, stabilization, transportation, and purification of DNA from saliva.
"Joining forces with OraSure at this time will be instrumental in taking DNA Genotek to the next level. Together we will have the ability to capitalize more quickly on the tremendous opportunity in the rapidly growing molecular research and clinical diagnostic markets,” said Ian Curry, DNA Genotek’s president and CEO.
The deal is subject to satisfaction of closing conditions. Upon closing, OraSure says it expects to record one-time acquisition-related charges, as well as noncash amortization charges related to the intellectual property it is acquiring.
OraSure says its DNA Genotek acquisition should have no impact on non-GAAP earnings, excluding transaction costs and required acquisition accounting adjustments, while adding to revenue growth this year. Next year and beyond, OraSure expects the deal to add to its non-GAAP earnings as well as revenue growth.
Deutsche Bank Securities Inc. served as exclusive financial advisor to OraSure, while Moelis & Company acted as advisors to DNA Genotek.