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PerkinElmer to Acquire Euroimmun for $1.3B

NEW YORK (GenomeWeb) – PerkinElmer said today that it has inked a definitive agreement to acquire Lübeck, Germany-based Euroimmun Medical Laboratory Diagnostics for about $1.3 billion in cash.

Euroimmun is recognized as a global leader in autoimmune testing and an emerging force in infectious disease and allergy testing, and has "extensive expertise and capabilities" across immunology, cell biology, histology, biochemistry, and molecular biology, PerkinElmer said.

The combination expands PerkinElmer's reach into the autoimmune and allergy diagnostic markets, and enables it to offer "new infectious disease capabilities to customers in China," PerkinElmer said, adding that the acquisition will give it "the opportunity to drive Euroimmun's solutions" into PerkinElmer's "well-established" reproductive health channel in the US.

The company has averaged 19 percent revenue growth over the last five years and is expected to generate about $310 million in revenue this year, PerkinElmer said. In 2016, it generated sales in more than 130 countries worldwide, with about 45 percent of revenues in China; 30 percent in Europe, Middle East and Africa; 5 percent in the Americas; and 20 percent in the rest of the world.

PerkinElmer Chairman and CEO Robert Friel said in a statement "With the acquisition of Euroimmun…we are able to leverage our combined advanced detection, imaging, and assay development capabilities, along with our strong collective market positions and synergistic commercial activities, to deliver better and more complete solutions to our customers around the world."

Friel said on a conference call with analysts to discuss the deal that the markets in which Euroimmun plays are growing at an estimated average rate of 8 percent per year. He added that Euroimmun has been growing at a far higher rate than the markets in which it participates, partly because of its breadth of menu and technologies, its demonstrated ability to quickly bring assays to market, and the extensive number of academic collaborations that it has built up over more than 10 years.

Evercore ISI analyst Ross Muken wrote in a research note today that for PerkinElmer, Euroimmun marks a well foreshadowed departure "from prior small tuck-in acquisitions and furthers management’s push into accelerating PKI’s growth rate and transforming the business into a Dx leader." He said that Euroimmun brings unique capabilities in emerging markets, notably China, and broadens PerkinElmer's specialty Dx portfolio, especially in immunology and allergy, "with synergy potential if the company is able to leverage their US channel to improve [North America] penetration," which is unusually low at about 5 percent.

PerkinElmer said that it expects the deal will close in the fourth quarter of this year, and be accretive to its 2018 non-GAAP earnings per share by about $0.28 to $0.30. The company reaffirmed its 2017 revenue and EPS guidance. 

In Monday morning trading on the New York Stock Exchange, PerkinElmer's shares were up almost 5 percent to $66.73.