Agilent to Acquire BioTek Instruments for $1.17 Billion, Expanding Cell Analysis Business Beyond $250 Million in Annual Revenue

On July 11, 2019, VCBeat (WeChat ID: vcbeat) learned that Agilent Technologies announced the acquisition of life sciences instrument manufacturer BioTek Instruments for $1.17 billion. With expected tax benefits, the net purchase price is projected to be approximately $1.05 billion.

Subject to regulatory approval, the transaction is expected to close in the fourth fiscal quarter. The acquisition is projected to contribute $0.02 to $0.04 in non-GAAP earnings per share for Agilent’s fiscal year 2020, with compounded growth thereafter.

BioTek Instruments, founded in 1968 and headquartered in Vermont, USA, is a global leader in the development, manufacturing, and sales of life science instruments. The company is dedicated to designing, manufacturing, and selling instruments for the life sciences industry, including cell imaging systems, microplate readers, washers, dispensers, automated incubators, and stackers. In 2018, the company’s revenue reached $162 million, with an expected growth of approximately 10% in 2019.

Agilent President and CEO Mike McMullen pointed out that this acquisition will expand the company’s position in the cell analysis market. Agilent entered the market in 2015 through the acquisition of Seahorse Bioscience. In 2018, Agilent expanded its portfolio of cell analysis solutions by acquiring Luxcel Biosciences and ACEA Biosciences. The company stated that after completing the acquisition of BioTek, its annual revenue from the cell analysis business will exceed $250 million.

“This is another initiative by Agilent to invest in the life sciences market to serve both new and existing customers. BioTek will continue to operate in Vermont and retain its excellent team of nearly 500 employees, as these employees have been the core of BioTek’s development for over 50 years,” McMullen said in a statement.

“By integrating BioTek’s products with Agilent’s offerings, we provide customers with a broad range of differentiated workflows, enabling them to obtain deeper and more reliable insights across various cell analysis applications,” added Jacob Thaysen, President of Agilent’s Life Sciences and Applied Markets Group. “As customers seek to understand complex cellular environments and interactions, this positions Agilent favorably within the large and rapidly growing immuno-oncology and immunotherapy market, while also expanding our presence in the biopharmaceutical, academic, and research sectors.”

In a report to investors, Evercore ISI analyst Ross Muken stated, “For Agilent, this acquisition is a prudent move, as it aligns with the company’s existing needs for developing its cell analysis business. BioTek also enhances investment in the biopharmaceutical end market. Furthermore, BioTek meets Agilent’s overall growth requirements and can provide moderate support to earnings in 2020 and beyond. We believe that management will operate BioTek as an independent business post-acquisition, as it has done with previous acquisitions, which may help improve profit margins.”

SVB Leerink analyst Puneet Souda wrote in another report, “Although the valuation of this acquisition is lower than what Agilent previously pursued, we also recognize that it is challenging to find attractive assets in the cell analysis market, which has a relatively low valuation, yet this market will inevitably play a significant role in the long-term development of immuno-oncology, cell, and gene therapy drugs.”

(Compiled by Cheng Tao)