PerkinElmer is set to add antibody and reagent supplier BioLegend in a deal that analysts say could transform its Discovery and Analytical Solutions (DAS) business into a high growth segment.
The acquisition announced yesterday and expected to close by the end of the year will see life sciences giant PerkinElmer pay $5.25 billion – including $2.2 billion in stock consideration – for private antibody and reagent developer BioLegend.
The proposed deal xpands PerkinElmer into the “fast growing, high margin, antibody focused markets [and] increases PerkinElmer’s overall mix of recurring revenue,†the firm said on a call yesterday, adding the merged entity will create a $1.5 billion plus life science franchise with  around $700 million in life science research reagent revenue by 2022.
Image: iStock/AndreyPopov
The deal is focused on “gaining momentum in emerging, high-growth areas of proteogenomics, recombinant proteins, and bioprocessing,†the company added.
San Diego, California-based BioLegend employs over 700 staff and serves more than 10,000 academic and biopharma-related customers in 130 countries. The company’s estimated 2022 revenues stand at around $380 million.
Upon joining PerkinElmer, BioLegend’s campus “will become PerkinElmer’s global Center of Excellence (CoE) for research reagent content development for the combined company.â€
Evercore ISI analyst Vijay Kumar welcomed the news noting that the deal could “transform the company’s DAS segment into a high single-digit (HSD) growth segment. At ~14x current year ‘22 revenues, the multiple paid was reasonable for an asset with 100% consumables and super high margins that is expected to grow at mid-teens.â€
He continued: “At a high level, BioLegend provides antibodies – given that Becton Dickinson and Thermo Fisher play in these markets, some had questions around sustainability of growth.
“First, BioLegend’s historical ~20% growth rate should give comfort around execution. Second, not all antibodies are the same – BioLegend primarily plays in conjugated antibody space, which is more differentiated / harder to manufacture vs primary antibody market. These conjugated antibodies are used in a variety of applications, including proteogenomics, single cell research and bioprocessing.â€
M&A history
The planned acquisition is the latest – and the largest – for PerkinElmer.
In May, the firm shelled out $260 million in cash for Nexcelom, bolstering its preclinical portfolio and cell and gene therapy manufacturing capabilities.
The same month, the firm acquired diagnostics firm Immunodiagnostic Systems Holdings for $155 million, two months after closing the acquisition of diagnostics firm Oxford Immunotec Global.
And late last year, Horizon Discovery Group was snapped up for $383 million, bringing gene editing and RNAi tech to PerkinElmer’s offering.