Serologicals Corporation has signed an agreement to acquire Chemicon International, Inc., a privately-owned company based in Temecula, California that supplies a variety of specialty reagents, antibodies and molecular research tools to the life sciences industry.
Under the terms of the agreement, Serologicals will purchase Chemicon and certain affiliated companies for $95 million in cash, less Chemicon's outstanding debt as of the closing date. Serologicals will finance the transaction using proceeds from a new $100 million five-year term loan. This term loan, combined with a new revolving credit facility, which is currently expected to be $25 million, will replace the Company's existing $65 million facility.
The transaction is expected to close on March 31, 2003, pending regulatory approvals and completion of the aforementioned financing. Serologicals has retained UBS Warburg LLC as its financial advisor for this transaction.
“The acquisition of Chemicon represents another significant step in the execution of our plan to transform Serologicals into a company that is focused on providing a broad range of biological products in all phases of the biomedical product pipeline and particularly in the areas of cell culture and molecular biology,” said David A. Dodd, president and chief executive officer of Serologicals Corporation. “We plan to operate Chemicon as a stand-alone division of the Company and plan to retain the existing management team. This transaction will provide us a platform on which to continue to add on incremental acquisitions and product licensing opportunities to serve the needs of the life science research market. Finally, we expect that this acquisition will be accretive to earnings in 2003.”
Chemicon provides a broad range of specialty reagents, kits, antibodies and molecular biology tools to biotech, pharma and academic research customers working in the areas of neuroscience, infectious disease, drug discovery, cancer research, stem cell research and proteomics. The company is also a leading supplier of monoclonal antibodies, conjugates, antibody blends and kits for use in the diagnostic laboratory. Chemicon has a proven track-record of being able to successfully identify, develop, manufacture, and commercialize new products very quickly, and introduced more than 500 new products during 2002. In addition, Chemicon has achieved compound revenue and profitability growth of more than 25 per cent over the last several years. During 2002, Chemicon recorded sales of approximately $40.4 million.
“A key factor to the historical success of Chemicon is the hard work and dedication of our employees and I am extremely pleased that Chemicon will become part of the Serologicals organization,” said David Beckman, Chemicon's president and founder. “Combining Chemicon with Serologicals will leverage the strengths of both companies and will enable Chemicon to continue building upon its legacy of growth and profitability. This is an exciting move forward for Chemicon and its employees worldwide, as well as for our customers and business partners. ”
The Chemicon acquisition provides a number of strategic benefits to Serologicals including the following:
Chemicon's product and customer base will greatly enhance Serologicals' product offering of molecular biology and diagnostic reagent products. The acquisition also significantly enhances the presence of Serologicals in the research element of the biomedical product pipeline, which complements the Company's strong presence in the development and production phases.
Chemicon's sales, distribution and R&D infrastructure will provide a significant platform on which to continue to expand the Company's growth in the area of life sciences reagents and products to distribute to the vast research marketplace.
The product, technology and development assets of Chemicon and its relationships with researchers will allow Serologicals to continue to leverage the molecular biology business acquired in the December 2001 acquisition of the Intergen Company.
Chemicon's catalog-based sales model and large customer base will provide additional opportunities for Serologicals to expand the reach for certain of its core cell culture products such as EX-CYTE, recombinant insulin and BSA.
As a result of the acquisition, Serologicals will be taking another significant step towards its stated strategic goal of expanding its business in the areas of cell culture and molecular biology.
In addition to its 85,000 square foot facility in California which houses the corporate headquarters, manufacturing, distribution and R&D, Chemicon also has other domestic operations as well as operations in Australia and the United Kingdom.