The acquisition of BioLegend marks the largest transaction in PerkinElmer’s history and is expected to close by the end of this year. This is the sixth acquisition of 2021 for the Waltham, Mass. company who produces diagnostic tools and life science equipment for a variety of industries such as diagnostics, pharma, academic, food and applied markets.
Under the terms of the deal, PerkinElmer will pay $2.2 billion in common stock with the remaining approximate $3 billion being in cash and debt, according to the company’s form 8-K. The acquisition is expected to be accretive to PerkinElmer’s revenue growth and provide an estimated $0.30 of adjusted earnings per share accretion in the first full year.
According to both company’s top executive, this deal is one that will help grow both enterprises current offerings and allow the business to be in a position for future growth in San Diego.
Prahlad Singh, president and chief executive officer of PerkinElmer said that from a portfolio perspective this deal was attractive because it complemented their business and there was no overlap between their product offerings. Additionally, from a company culture perspective he said it just made sense.
“The culture that Gene has built here over the past couple of decades was very akin to the culture that PerkinElmer has and it was a very good fit from a chemistry perspective, and I mean people chemistry not product chemistry,” Singh said.
San Diego-based BioLegend has more than 700 employees and estimated revenues of $380 million for 2022. The private company’s founder and CEO, Gene Lay, said that this investment offers BioLegend more resources and infrastructure to innovate in new PerkinElmer areas such as clinical diagnostics and food safety testing.
He added that by becoming part of a publicly traded company it offers new opportunities for BioLegend’s employees to access enhanced benefits that come with a larger company and more easily share in the potential growth of the company going forward.
While the size of the transaction is significant, Lay acknowledged that the manner of the deal is also notable. BioLegend will remain in San Diego, while the titles of its employees and its mission to support scientific innovation will not change, Singh said.
“Our intent and our culture is not to come in and change — our intent and our culture is one to help provide resources and get out of the way and let the company grow and flourish, the way that they have,” Singh said.
BioLegend’s current San Diego location will become PerkinElmer’s global Center of Excellence (CoE) for research reagent content development for the combined company.
Synergy and Growth Opportunity
The combined company is expected to generate immediate revenue synergies which over time are expected to reach $100 million annually by the fifth year following the close, according to the acquisition announcement. On July 26, PerkinElmer also released its Q2 earnings and reported an adjusted operating income of $411 million and revenue of $1.23 billion.
Singh said this acquisition will allow Massachusetts-based PerkinElmer to expand west, where they didn’t previously have a presence.
“Our intention here is to build a talent powerhouse around the reagent life sciences business in the San Diego area and the BioLegend campus,” Singh said. “And the cultural fit between the two companies, the opportunity that we have to provide a more comprehensive solution for our customers is something that’s very attractive and that we hope to build on in the coming years.”
Both leaders envision the San Diego Center of Excellence as a future talent hub that will benefit not only the combined company, but the local life science community as well.
“I’m thrilled by this tremendous opportunity not only for our employees, our customers, but also to the San Diego community because we’re going to continue to expand here, and we need a lot of talent,” Lay said. “So, this is a new chapter for BioLegend to continue to excel.”
BUSINESS: Manufactures antibodies and reagents for biomedical research.
EMPLOYEES: 700+ employees
REVENUE: Estimated 2022 revenues of $380 million
NOTABLE: The company produces SARS-CoV-2 recombinant proteins and antibodies to investigate the interactions between S1 spike protein and human ACE2 for viral entry.
BUSINESS: Delivers unique solutions to serve the diagnostics, life science, food and applied markets.
EMPLOYEES: Approx. 14,000 employees worldwide
STOCK: PKI (NYSE)
REVENUE:$3.78 billion (2020)
NOTABLE: The acquisition of BioLegend is the largest transaction in PerkinElmer’s history.