PerkinElmer said today it agreed to acquire BioLegend, a provider of life science antibodies and reagents, for approximately $5.25 billion in cash and stock—the largest acquisition in the buyer’s history—in a deal designed to position PerkinElmer as a leading precision medicine company by accelerating its life science growth within clinical diagnostics.
Based in San Diego, BioLegend provides antibodies and reagents in areas that include cytometry, proteogenomics, multiplex assays, recombinant proteins, magnetic cell separation, and bioprocessing, for both academic and biopharmaceutical customers. In addition to its development of antibodies and reagents, the company has developed a complementary portfolio focused on tapping emerging, high-growth areas such as biologics, cell and gene therapy, proteogenomics, and recombinant proteins.
“We are thrilled to have the opportunity to bring our technologies and innovative cultures together to create seamless solutions to push science and discovery forward,” Prahlad Singh, PerkinElmer’s president and CEO, said in a statement. “We believe joining our teams presents an incredible opportunity to accelerate discoveries that help life science researchers leverage ever-developing technologies and novel approaches to better understand and fight disease.”
Investors responded to the announcement of the BioLegend acquisition by sending PerkinElmer shares up $3.66 (2.23%) to $168 a share as of 11:51 a.m. ET.
Privately-held BioLegend has more than 700 employees based largely in the United States, with revenues that are estimated to reach $380 million in 2022, with revenue growth expected to reach the mid-teens, excluding synergies. PerkinElmer employs about 14,000 people, serves customers in 190 countries, and finished last year with revenues of approximately $3.8 billion.
PerkinElmer and BioLegend have identified immediate revenue synergies that are expected to reach $100 million annually by the fifth year following the close of the deal, but added that no “significant” cost synergies are planned.
Adding to revenue, margin
According to PerkinElmer, the combination of the companies is estimated to enhance its revenue growth and margin by adding $0.30 of adjusted earnings per share in the first full year following the close of the transaction, and more than $0.50 per share in the second year following the close.
In a separate announcement today, PerkinElmer reported finishing the second quarter with net income of $245.93 million, up 79% from $137.162 million in Q2 2020, on GAAP revenue that jumped 51% to $1.229 billion from $811.718 million in the second quarter of last year.
The transaction is expected to close by the end of 2021, subject to regulatory approvals and other customary closing conditions.
Upon closing of the deal, BioLegend’s San Diego campus will become PerkinElmer’s global Center of Excellence (CoE) for research reagent content development for the combined company. Also, PerkinElmer will add new segments to its existing life science franchise.
PerkinElmer now has a life sciences market within its Discovery & Analytical Solutions Segment that combines its life sciences research and laboratory services markets. In the life sciences research market, PerkinElmer includes solutions such as its reagents, informatics, and detection and imaging technologies for biopharma companies, contract research organizations, and academic institutions.
The company also provides services designed to help customers in the laboratory services market increase efficiencies and production time while reducing laboratory maintenance costs, such as its OneSource® laboratory service business.
PerkinElmer said it had secured a full commitment to bridge financing from Goldman Sachs Bank for the cash portion of the purchase price.
Back in 2009, BioLegend agreed to offer immunoassay development and bioanalytical testing based on PerkinElmer’s AlphaLISA® assay technology, through a collaboration of undisclosed value.
“We are very excited to join the PerkinElmer family. The combination will afford us the opportunity to continue to build on our two-decade foundation of innovative science and scale in new and highly attractive PerkinElmer areas such as clinical diagnostics and food safety testing,” added Gene Lay, BioLegend’s founder, president, and CEO. “The BioLegend team is eager to enter this new chapter with PerkinElmer, furthering our mission of enabling legendary discovery from research to cure.”