PerkinElmer aims to cement itself as a major provider of reagents and consumables for precision medicine and diagnostic test development through a $5.25 billion deal for BioLegend, a global producer of antibodies and other research tools.
In what will become the company’s largest acquisition ever, PerkinElmer will hand over $2.2 billion in stock to BioLegend shareholders, with the remainder made up of cash-on-hand and newly issued debt, as well as bridge financing from Goldman Sachs. The deal is slated to close before the end of this year.
“This acquisition aims to broaden our offerings across the whole workflow in drug discovery,” PerkinElmer President and CEO Prahlad Singh said on a call with investors, adding that the resulting $700 million reagent franchise will cover both small and large molecule drugs as well as cell and gene therapies, proteogenomics and recombinant protein work.
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, more than 80% of the combined company will be tasked to life sciences and diagnostics, through a franchise topping $1.5 billion and a pipeline that will aim to put forward more than 1,000 new products annually through antibodies, assay kits, bioprocessing supplies and chemistry platforms.
Today, the privately held BioLegend counts more than 700 employees, with the majority based in the U.S., including at its newly outfitted research campus and headquarters in San Diego, which PerkinElmer plans to spin into a global hub for the future company’s reagent development.
Looking to 2022, the companies estimate BioLegend’s businesses will add $380 million in revenue for the year, with more than half based in North America, 20% coming from the Asia-Pacific region and 25% from Europe and the rest of the world, across 130 countries total.
“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,” Gene Lay, BioLegend’s founder, president and CEO, said in a statement.
Alongside the announcement, PerkinElmer also delivered its second quarter earnings report, illustrating strong rebounds from last year’s early stages of the COVID-19 pandemic.
The company’s non-coronavirus revenue, spanning applied genomics and reproductive health, grew by 28%, while its COVID testing and research supplies sales have swelled by 86%, from $196 million to $365 million.
However, PerkinElmer expects to see its COVID product revenues drop sharply in the coming months—by about $200 million, down to about $165 million before the end of September—before amounting to a $1.14 billion haul at the end of this year.
In total, the company posted adjusted revenue of $1.23 billion for 2021’s second quarter, a 51% growth.
The deal for BioLegend may represent a capstone for PerkinElmer’s recent M&A strategy, which has been boosted by COVID testing revenues.
Earlier this year the company opted to absorb Immunodiagnostic Systems, a U.K. producer of tests for autoimmune, endocrine and infectious diseases, for about $155 million. Before that, PerkinElmer snatched up CRISPR gene editing provider Horizon Discovery for $383 million last November.
Now, for the immediate future, CEO Singh said PerkinElmer will focus on a seamless transition and the building of its new reagents franchise.