Azenta Eyes New Acquisitions with $2.3 Billion Cash Reserves

If a popularity contest for the hottest fields of 2022 were held, life sciences automation would certainly have a place.

In 2022, top-tier investment firms and tech giants—including Hillhouse Capital, Qiao Capital, Qiming Venture Partners, Sherpa Capital, Sunshine Ronghui Capital, and ByteDance—flocked to the sector in succession. Twelve life sciences automation companies collectively raised nearly RMB 3 billion, setting a new record for total financing. It became common for multiple companies to experience situations where, after announcing their funding rounds, they received visit requests from more than ten institutional investors.

Compared with multinational giants such as Agilent and Thermo Fisher Scientific, which have dominated the industry for over a decade, these innovative enterprises may be smaller in scale. However, given favorable macro-environmental factors—including the momentum of China’s life sciences industry and the wave of domestic substitution—there is strong potential for several large-scale life sciences automation companies to emerge.

To understand the growth trajectories of overseas giants, VCBeat conducted a business review of international life sciences automation companies. During this process, Azenta, a “low-key king,” came into focus. Azenta, formerly known as Brooks Automation—a global leading provider of automation equipment (hereinafter referred to as Azenta for clarity)—completed the spin-off of its semiconductor automation business in 2022, becoming a company with 100% life sciences automation DNA.

Compared with industry veterans like “Roche, Agilent, Siemens, and Beckman” that began their strategic layouts at the start of this century, Azenta is a “newcomer” to life science automation, having entered the field only in 2010 through acquisitions. Leveraging the robust cash flow from its semiconductor automation business, Azenta pursued an aggressive “buy-as-you-please” strategy over the past 12 years, rapidly emerging as a leading enterprise in niche segments of life sciences and listing on the NASDAQ in 2021.

According to Azenta, Inc.’s fourth-quarter and full-year 2022 financial reports, the company’s total balance of cash, cash equivalents, restricted cash, and marketable securities stood at $2.3 billion (approximately RMB 15.579 billion) as of fiscal year 2022. As expected, this cash-rich industry leader is once again on the lookout for new acquisition targets.

Azenta’s predecessor, Brooks Automation, was founded in 1978 and provides advanced automation equipment to semiconductor original equipment manufacturers (OEMs) and chipmakers worldwide. In the course of its business expansion, Azenta recognized the value of automation and cryogenic solutions for researchers, as well as the substantial unmet demand in the blue-ocean market for comprehensive sample lifecycle management. Acquisition has become Azenta’s preferred strategy for cross-industry expansion.

In April 2011, Azenta made its first move by acquiring RTS Life Sciences, a UK-headquartered company specializing in automated cryogenic sample management for laboratories, for $3.3 million in cash (RTS Life Sciences was later acquired by bioMérieux in 2012). In July, it brought Nexus Biosystems, the global market leader in life science automation solutions for compound and sample management, under its wing for $79 million in net cash. These two transactions jointly laid the foundation for Azenta’s development in the fields of biobanking and compound sample management.

"Cash acquisitions" are a major feature of Azenta, Inc.'s M&A strategy, with 13 out of 16 public transactions conducted in cash. Azenta also follows a set of criteria for target selection:It must be a leader in a niche segment of the life sciences industry and align with Azenta’s existing automation business.Guided by this corporate vision, Azenta continuously engaged in acquisitions over the following decade, emerging as a global leader providing one-stop solutions for sample lifecycle management.

Notably, among numerous acquisitions, the 2018 acquisition of global genomics services provider GENEWIZ (Jinweizhi) was Azenta’s largest acquisition in the life sciences sector.

Genewiz, established in 1999, provides high-throughput sequencing, Sanger sequencing, gene synthesis, primer synthesis, gene editing, molecular biology services, and GLP-compliant services to scientific researchers worldwide. Owing to Genewiz’s rigorous scientific approach and exceptional service quality, numerous researchers—including nearly 30 Nobel laureates—have become loyal clients. Many renowned multinational corporations and prestigious academic institutions around the globe have also selected Genewiz as their strategic partner and preferred supplier.

In September 2018, Brooks acquired Genewiz, a New Jersey-headquartered company, for $450 million in cash. Dr. Guojuan Liao, co-founder and CEO of Genewiz, continued to serve as President, leading the company’s operations and management team.Azenta Life Sciences has acquired the genomic research and gene technology applications of Genewiz, adding a major industry foothold to its portfolio.

In 2022, Azenta further integrated Barkey and B Medical Systems, two leaders in the niche sample management market, expanding its critical sample services to new markets and customers and creating a comprehensive, end-to-end sample management solution.

To date, Azenta Life Sciences provides a comprehensive suite of analytical, management, and storage solutions for biological and chemical samples, as well as genomic services, to top-tier global pharmaceutical companies, biotechnology firms, and academic and medical institutions, covering areas such as drug development, clinical research, and advanced cell therapies.

As its business expanded, Azenta sought to “reach new heights”: a more focused business portfolio would lead to better stock performance, and a spin-off could enhance shareholder returns when facing pressure from activist investors. Thus, in May 2021, Azenta announced its “split”: the company was divided into two, with its semiconductor automation business and life sciences business spun off to develop as two independent publicly listed companies.

“The benefits of the ‘spin-off’ were obvious, and the entire process encountered no significant obstacles. Over the following year, the semiconductor automation business, which retained the Brooks name and brand from Azenta’s predecessor, was sold for $3 billion in cash to Thomas H. Lee Partners, a semiconductor automation group.”

The life sciences business continues to grow under the new identity of “Azenta Life Sciences” (Azenta). Azenta’s commitment to the life sciences sector is reflected in its corporate name: “Azenta” signifies “rising” or “higher,” helping customers reach new heights in their pursuit of scientific advancement. Former CEO Steve Schwartz and CFO Lindon Robertson have directly assumed core leadership roles at Azenta.

Behind this anniversary lies a decade of pent-up momentum. On December 15, 2021, marking Azenta’s tenth year in the life sciences industry, Azenta was invited to ring the closing bell at the Nasdaq MarketSite in Times Square, New York, celebrating the launch of its Nasdaq ticker symbol “AZTA.”

In February 2022, Azenta announced the completion of a $3 billion transaction for its semiconductor business. After deducting taxes and other expenses, the net proceeds amounted to $2.4 billion, which will be used for strategic investments to fully accelerate the development of its life sciences business. The semiconductor automation business, which had been with Azenta for 44 years, helping and witnessing the birth and growth of its life sciences division, thus “retired after fulfilling its mission.” Azenta has since become a pure-play life sciences company.

To date, Azenta has over 3,000 full-time employees worldwide, with 30 branches across seven countries/regions, and its products are sold in more than 50 countries. As of the market close on February 17, 2023, its stock price was $46.38, with a market capitalization of $3.205 billion (approximately RMB 20.649 billion).

Azenta Life Sciences’ business primarily encompasses life science products and services. Its product portfolio includes life science automation equipment and consumables, ultra-low temperature automated storage systems, and cryogenic automation products; its services cover genomics services, sample storage, and bioinformatics analysis services.

Automated ultra-low temperature storage solutions are Azenta’s flagship products,including test tubes,PCRPlate and other consumablesmaterials, as well as ultra-low temperature cryopreservation equipment and informatics software, capable of providing cryopreservation services for biological and compound specimens at temperatures as low as -196°C and at a scale of up to millions of samples, thereby ensuring the quality, safety, and other critical aspects of customer specimens.Requirement.2023In [year], Anshengda will officially launch its new automated cryogenic storage system——Cryo Store Pico, providing enhanced sample protection, integrity, and traceability, as well as flexibility in laboratory consumables to ensure sample safety.

Azenta’s life sciences business serves a global customer base, including clinical research organizations, pharmaceutical companies, and scientific research institutions, with the world’s top20has business collaborations with biopharmaceutical companies. Due to the comprehensive nature of its sample storage management and genomics services, Azenta Life Sciences can maintain in-depth cooperation with clients and continuously acquire new customers. Currently, it has more than7000institutional clients.

2022Fiscal Year, Azenta Revenue5.55$100 million(approx.38.3100 million yuan), of which life sciences product revenue1.99billion USD; life sciences services revenue3.56hundred million U.S. dollars.

Azenta Life Sciences: Business and Revenue Share

2022Full-year capital expenditure was7300USD 10,000, includingPurchases of laboratory equipment for genomics operations, market expansion in Indianapolis, investments in genomics laboratories in the Boston area, and $19 million spent on constructing a facility in China.

Since 2011, leveraging the cash flow generated from its semiconductor automation business, Azenta has established a world-class life sciences business line, and with high-quality products and services,Over the past 4–5 years, life sciences business revenueFrom2016Fiscal Year's1.08hundred million US dollars in total revenue, increasing to2022of the fiscal year5.55billion U.S. dollars, and is expected to maintain its rapid growth momentum in the future.Based on this trend, Azenta, Inc. expects its revenue for the first quarter of fiscal year 2023 to be between $175 million and $190 million, with full-year fiscal 2023 revenue projected to grow by approximately 30% compared to fiscal year 2022.

Azenta’s fourth-quarter and full-year 2022 financial results show that, as of fiscal year 2022, the company’s total balance of cash, cash equivalents, restricted cash, and marketable securities amounted to $2.3 billion (approximately RMB 15.5 billion). These funds will also be used for strategic acquisitions. In 2023, Azenta successfully completed an acquisition of Ziath, a company specializing in 2D barcode readers for life science applications.

Notably, Azenta is also undertaking a $1.5 billion share repurchase program and plans to make an initial investment of $500 million in an accelerated share repurchase program.In European and American capital markets, stock buybacks are a method for listed companies to return earnings or profits to shareholders. Through stock repurchases, the number of publicly traded shares decreases, and market supply and demand dynamics drive up stock prices, thereby increasing the wealth held by shareholders.

Azenta has been present in the Chinese market for over a decade, establishing its headquarters in Suzhou and setting up branch offices in Beijing, Shanghai, Guangzhou, Tianjin, and other cities. It has also established laboratories in Suzhou, Nanjing, Tianjin, and Guangzhou. Building on this foundation, Azenta has formed a comprehensive global service network in collaboration with more than ten laboratories across North America, the Asia-Pacific region, and Europe.

In September 2021, to better meet the demands of the Chinese market, Azenta integrated its renowned life sciences brands across specialized sectors—including Brooks, GENEWIZ, RURO, FluidX, BioCision, and 4titude—under the unified entity Azenta Life Sciences. This consolidation enables Azenta to provide Chinese customers with comprehensive sample management solutions spanning genomics, cryogenic storage, consumables and equipment, bioinformatics, and ultra-low temperature automation.

On July 27, 2022, Azenta announced the opening of its new China headquarters in Suzhou, serving as the operational center for the Asia-Pacific region. Representing Azenta’s largest capital investment to date, the $19 million project established over 20,000 square meters of laboratory and office space. The facility consolidates all business lines of Azenta’s Suzhou laboratories and stands as Azenta’s largest genomics service center, delivering efficient and high-quality genomics services to customers worldwide.

Having grown up on the "shoulders of giants" in the semiconductor automation business, Azenta has seen the forest. It will not be trapped in the limited wars of the industry and make tired responses, nor will it hold the mentality of "guarding a small plot of land" to enjoy temporary benefits. The determination to split, the ambition to go public, and the boldness to face the Chinese market... Azenta's story is far from over.