Dive Brief:
- Agilent Technologies said Thursday that it has completed its $950 million takeover of the clinical pathology business Biocare Medical.
- The buyout, which the companies agreed to in March, gives Agilent control of automated Biocare immunohistochemistry instruments and reagents that supported sales of more than $90 million last year.
- Biocare developed its products to serve sectors, such as cancer and infectious disease diagnostic and research markets, that Agilent targets through its life sciences and diagnostics business.
Dive Insight:
Agilent CFO Adam Elinoff discussed the reasons for buying Biocare at a Jefferies event early this month. Elinoff named Biocare’s “complementary instruments” as one factor. Where Agilent’s existing Dako products are medium-throughput, the Biocare instrument is low-throughput, the CFO said.
Complementary geographies were another factor. Agilent plans to use its European infrastructure to help Biocare, according to Elinoff. Based in California, Biocare worked to expand in Europe through activities such as partner training events. However, competitors including Agilent’s Dako, Danaher’s Leica Biosystems and Roche were supported by larger organizations.
Test menu expansion was a third factor motivating Agilent’s takeover of Biocare. “That’s the name of the game,” Elinoff said. Buying Biocare and expanding the menu will “give us access to more tenders globally,” Agilent’s CFO added.
Finally, acquiring Biocare will give Agilent test development capabilities. “They’ve been very efficient in creating new antibody tests,” Elinoff said. The CFO called Biocare’s “innovation engine” a big opportunity that has received less attention than other aspects of the acquisition.
Biocare’s products slot into a life sciences and diagnostics business that grew 12% year over year to $732 million in the second quarter.
Agilent expects Biocare to add to its top-line growth, margin profile and non-instrument revenue mix in the first year. The deal will start adding to earnings per share in about 12 months, the company said. Agilent will share details of the expected impact of the takeover on the current financial year as part of its third-quarter earnings.
