Agilent Technologies said today that it has agreed to acquire privately held life science instrumentation manufacturer BioTek Instruments for $1.17 billion in cash.
With anticipated tax benefits for Agilent, the net purchase price is expected to be approximately $1.05 billion. Agilent expects the transaction to be completed in its fiscal fourth quarter, subject to regulatory approvals.
Winooski, Vermont-based BioTek designs, manufactures, and sells instruments for the life science industry, including cell imaging systems, microplate readers, washers, dispensers, automated incubators, and stackers. The company generated revenues of $162 million in 2018, and is expected to grow approximately 10 percent in 2019, Agilent noted.
Agilent expects the acquisition will be accretive to non-GAAP earnings per share, contributing $.02 to $.04 for fiscal year 2020, and compounding growth thereafter.
Agilent President and CEO Mike McMullen noted that the acquisition will expand the company's position in the cell analysis market, which Agilent entered in 2015 with its acquisition of Seahorse Bioscience. In 2018, Agilent broadened its portfolio of cell analysis solutions by acquiring Luxcel Biosciences and ACEA Biosciences. Upon closing the acquisition of BioTek, Agilent's cell analysis business will bring in more than $250 million in annual revenues, the company said.
"This is another example of Agilent investing in high-growth segments of the life sciences market to serve new and existing customers. Agilent is committed to continuing operations in Vermont and retaining the great team of nearly 500 employees that have been at the core of BioTek's 50-year history of excellence and success," McMullen said in a statement.
"By combining BioTek's offerings with Agilent's, we will deliver a breadth of differentiated workflows, enabling customers to obtain deeper, more reliable insights across a variety of cell analysis applications," Jacob Thaysen, president of Agilent's life sciences and applied markets group, added. "This positions Agilent well in the large and growing immuno-oncology and immunotherapy markets and expands our presence in biopharma, academia, and research as customers seek to understand complex cellular environments and interactions."
In a note to investors, Evercore ISI analyst Ross Muken said the acquisition is a "sensible deal" for Agilent, as it fits well within the firm's existing cell analysis business.
"BioTek also brings increased exposure to biopharma end markets," he added. "Additionally, BioTek fills a growth need for the overall business and should provide a modest support to earnings in 2020 and outer years. We believe management will operate the business as a standalone entity, similar to previous acquisitions, and low-to-mid 20s margins are likely to improve from implementing Agilent's business processes."
In a separate note, SVB Leerink analyst Puneet Souda wrote that while the acquisition is at a steeper valuation than what Agilent has previously pursued, "we also appreciate that it is challenging to find attractive assets at lower valuation in the cell analysis market, which is bound to be heavily levered to immuno-oncology, cell, and gene therapy drug development longer-term."
Souda said that overall, the deal "firmly plants" Agilent in the cell analysis market and expands its instrument-heavy, translational research tools portfolio beyond its prior acquisitions.
Agilent's shares dipped less than 1 percent to $72.93 in Thursday morning trading on the New York Stock Exchange.
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