Bio-Techne Corp. is acquiring a California biotech firm for $250 million, marking a step into new territory, the company announced this week.
The Minneapolis maker of biotech research supplies will absorb Advanced Cell Diagnostics (ACD), a Newark, N.J., company with about 100 employees. ACD has annual revenue of about $25 million, Bio-Techne said in a news release. It is best known for its RNAscope technology, which detects genetic information at the cellular level.
The deal allows Bio-Techne to enter the genomics research and diagnostics market, Bio-Techne President and CEO Charles Kummeth said in the news release, issued Wednesday.
"Its innovative and versatile technology has the potential to change pathology practices," Kummeth said. "ACD's technology serves both research and diagnostic markets, expanding Bio-Techne's presence in the clinical lab setting."
The deal is set to close Aug. 1 and is expected to be accretive to earnings in fiscal year 2018, which begins July 1, 2017, Bio-Techne said in its release. ACD could receive another $75 million "upon achievement of certain milestones."
Shares in Bio-Techne saw a modest bump to $115.17 by Friday, up from Wednesday's close $112.95.
Growth by acquisition has been a key game plan for Bio-Techne, which has about 1,500 employees worldwide. It announced three other deals earlier this year, and five others in the previous two years. The company reported net income of $30.3 million for its fiscal third quarter ended March 31, up from $24.3 million for the same period a year ago. Revenue increased 15 percent, to $131 million.
Bio-Techne's expansion into diagnostics and genomics makes sense given the company's history of buying companies and technology that complement its existing business, said Amanda Murphy, an analyst covering Bio-Techne for William Blair Co. in Chicago.
"[The deal] is in line with their acquisition strategy, which they've been pretty vocal about," Murphy said. "They're trying to accelerate their growth profile, so they're acquiring things that are not only faster-growth but where they see a path to leverage other parts of the business with the new technology. In this case, there's a channel into diagnostics they now have."
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