Bio-Techne said it has agreed to acquire molecular pathology test developer Advanced Cell Diagnostics (ACD) for up to $325 million in a deal that expands the buyer’s offerings into genomics technology, as well as its presence within clinical labs.
Founded in 2006 by President and CEO Yuling Luo, Ph.D., and COO Steve Chen, Ph.D., ACD develops cell- and tissue-based diagnostic tests for personalized medicine. ACD’s products and services are based on its proprietary RNA in situ hybridization, or RNA ISH, technology, a proprietary target hybridization and signal amplification technology enabling the detection of single RNA molecules in single cells and commercialized under the RNAscope® brand name.
According to ACD, RNA ISH could provide pathologists with reagents capable of specifically detecting transcripts of expressed genes, noncoding RNAs, as well as more subtle genetic details, such as gene splice variants, gene fusions, copy number variations, and single-nucleotide polymorphisms.
“With broader adoption of the technology in the diagnostic arena, it has the potential to revolutionize the choice of reagents in diagnostic practices, such as oncology, infectious diseases, and others,” Bio-Techne President and CEO Charles R. Kummeth said in a statement. “As we continue to expand the portfolio of products and technologies we bring to our customers, we view the leading-edge ACD products as a natural and complementary extension of the Bio-Techne product offering.”
ACD has more than 100 employees and a product line of more than 9000 probe reagents and reagent kits for manual and automated use.
ACD has generated annual revenues of approximately $25 million over the last 12 months, with an annualized growth rate of approximately 50%. The company is headquartered in Newark, CA, with field offices in Italy, China, and Japan.
Bio-Techne agreed to buy ACD for $250 million cash upfront, plus up to $75 million tied to achieving undisclosed milestones. The buyer said it expected its acquisition of ACD to “slightly” reduce its adjusted earnings per share (EPS) for its fiscal year 2017, but increase adjusted EPS thereafter.
The transaction will be financed through a combination of cash on hand and a revolving line of credit facility that Bio-Techne said it expects to obtain before the closing of the deal, which is expected on or about August 1.
“The combined business represents a one-stop-shop for our customers and positions us well to compete and expand in the global market,” Dr. Luo added.