NEW YORK – Meridian Bioscience announced on Friday that it has inked a definitive agreement to acquire Otsuka America Pharmaceutical's North American BreathTek business for $20 million in cash.
Under the agreement, Meridian will take over the customer relationships to supply BreathTek, a urea breath test for the detection of Helicobacter pylori. In a statement, Meridian said the acquisition will likely add more than $20 million of annual revenue and be accretive to earnings and cash immediately.
Meridian received clearance last year from the US Food and Drug Administration for its own H. pylori assay for use with stool samples on its Curian analyzer.
The Otsuka transaction is expected to close in Meridian's fiscal fourth quarter.
"This is another example of our strategic use of cash generated during the pandemic to further position the diagnostics segment for sustainable growth," Meridian CEO Jack Kenny said in a statement.
The firm's diagnostics segment has been negatively impacted by the COVID-19 pandemic, with revenues for the business dropping 9 percent in the fiscal second quarter. The life sciences business, however, has seen significant growth due to demand for molecular reagents to be used in SARS-CoV-2 tests.