PerkinElmer to buy BioLegend for $5.3bn

October 2021 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

October 2021 Issue

PerkinElmer Inc has entered into an agreement to acquire BioLegend, a leading global provider of life science antibodies and reagents, for approximately $5.25bn in a combination of cash and stock.

The deal, which is subject to regulatory approvals and other customary closing conditions, is expected to complete by the end of 2021. Under the terms of the deal, PerkinElmer will pay around $2.2bn in stock to BioLegend shareholders, with the remainder made up of cash-on-hand and newly issued debt, as well as bridge financing secured from Goldman Sachs USA.

The deal is expected to be accretive to PerkinElmer’s existing revenue growth and margin profile and provide an estimated $0.30 of adjusted earnings per share accretion in the first full year following close, rising to greater than $0.50 in the second year following close. The combined company will generate immediate revenue synergies which are expected to reach $100m annually by the fifth year following transaction close.

“We are thrilled to have the opportunity to bring our technologies and innovative cultures together to create seamless solutions to push science and discovery forward,” said Prahlad Singh, president and chief executive of PerkinElmer. “We believe joining our teams presents an incredible opportunity to accelerate discoveries that help life science researchers leverage ever-developing technologies and novel approaches to better understand and fight disease.”

“We are very excited to join the PerkinElmer family,” said Gene Lay, founder, president and chief executive of BioLegend. “The combination will afford us the opportunity to continue to build on our two-decade foundation of innovative science and scale in new and highly attractive PerkinElmer areas, such as clinical diagnostics and food safety testing. The BioLegend team is eager to enter this new chapter with PerkinElmer, furthering our mission of enabling legendary discovery from research to cure.”

BioLegend, which has more than 700 employees globally, mostly in the US, is expected to generate sales of about $380m in 2022, according to the statement announcing the deal. BioLegend’s campus in San Diego will become PerkinElmer’s centre for development of substances used in research analysis, called reagents, and it will expand the company into new segments, the companies said in a statement. PerkinElmer also expects to see synergies in nearly every area of its current business, alongside new geographic expansions, with BioLegend’s antibodies being applied across its diagnostics portfolio.

As a result of the merger and reorganisation of the combined company, more than 80 percent of its resources will be dedicated to life sciences and diagnostics. The company aims to put forward more than 1000 new products annually through antibodies, assay kits, bioprocessing supplies and chemistry platforms. BioLegend provides antibodies and reagents in areas that include cytometry, proteogenomics, multiplex assays, recombinant proteins, magnetic cell separation, and bioprocessing, for both academic and biopharmaceutical customers. In addition to its development of antibodies and reagents, the company has developed a complementary portfolio focused on tapping emerging, high-growth areas such as biologics, cell and gene therapy, proteogenomics, and recombinant proteins.

The acquisition is PerkinElmer’s latest in a string of deals that includes Sirion Biotech GmbH, a provider of viral-vector technologies, and Nexcelom Bioscience.

In addition to the BioLegend announcement, PerkinElmer also delivered its second quarter earnings report, illustrating a strong rebound from last year’s early stages of the COVID-19 pandemic. The company’s non-coronavirus revenue, encompassing applied genomics and reproductive health, grew by 28 percent, while its COVID-19 testing and research supplies sales increased by 86 percent, from $196m to $365m. However, PerkinElmer, expects its COVID-19 product revenues to drop sharply in the coming months, by about $200m, down to around $165m by the end of September.

Richard Summerfield