BioTek to be sold for $1.165 billion

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BioTek to be sold for $1.165 billion

Thu, 07/11/2019 - 8:01am -- tim

by Timothy McQuiston, Vermont Business Magazine Winooski-based BioTek Instruments Inc, will be acquired by Agilent Technologies of Santa Clara, CA, for $1.165 billion, or a whopping seven times annual revenues in an all-cash deal. BioTek CEO Briar Alpert made the announcement this morning. The deal between BioTek, a life-science tool and software firm, and Agilent (AJ-i-lent), with whom they’ve partnered, will close during the fourth quarter of this year.

BioTek will retain its name and operate under the BioTek name, at least initially.

Agilent will make BioTek the centerpiece of its cell analysis division, or what Alpert said would be a "center of excellence."

Briar Alpert, left, in the lab at BioTek. BioTek image.

The business will stay put in Vermont and all the employees will be retained, with the exception of Alpert, 61, who will stay on as a part-time consultant. Agilent will for now lease the building, but could buy it in the future, Alpert said, and even the $1.8 million Vermont solar farm, which provides the equivalent of 100 percent of the plant's power, will go with the sale.

"I’m really thrilled," Alpert told VBM. "We found our best partner."

Indeed it was BioTek who initiated the search for a buyer. 

Agilent (NYSE: A) and BioTek signed a definitive agreement for it to acquire the private, family-owned BioTek just last week, Alpert said ("You don't have a deal until you have a deal.").

With anticipated tax benefits for Agilent, the net purchase price is expected to be approximately $1.05 billion. 

Agilent has a market cap of $23.2 billion. Its 52-week stock price range is $61.0/$82.27. It closed Wednesday at $73.37. Revenues in 2018 were $4.91 billion. Agilent, a spin-off of Hewlett-Packard Company, broke records on November 18, 1999, as the then largest IPO in Silicon Valley history.

BioTek is a global leader in the design, manufacture and distribution of innovative life science instrumentation. Its comprehensive product line includes cell imaging systems, microplate readers, washers, dispensers, automated incubators and stackers. 

These products enable life science research by providing customers with high performance, cost-effective analysis across diverse applications. 

BioTek generated revenues of $162 million in fiscal year 2018 ending December 31 and is expected to grow approximately 10 percent in 2019.

The transaction is expected to be completed in Agilent’s fiscal fourth quarter of this year, subject to regulatory approvals and customary closing conditions. Agilent expects the acquisition will be accretive to non-GAAP earnings per share, contributing $0.02-$0.04 for fiscal year 2020, and compounding growth thereafter.

"They're just so impressed with what we've accomplished," Alpert said.

He said the process to look for a buyer began in early January. It had become apparent, he said, that they'd reached a point where they needed to become part of a larger entity, with an even greater global reach, to maximize BioTek's opportunity to "go to the next level."

Over the years BioTek has received several acquisition offers, he said.

They hired an investment banker, Alpert said, who prepared them for the sales process and put a value on the company.

"In late March we started sending teasers out there," Alpert said.

Having laid the groundwork, he told the employees in April.

"I was frankly nervous," about telling the employees, Alpert said, not knowing how they would react. "But they were so supportive...they trusted me."

"That trust was front and center in my mind and I think I've honored that," Alpert said.

As evidence of the employees trust, no one (300 employees in Vermont and another 200 globally) spilled the beans. 

But the corporate world did catch wind of a possible acquisition in April and Bloomberg ran a story without naming sources that indicated that a billion dollar deal could be in the works. Bloomberg didn't say who because there wasn't a deal yet nor a single bidder.

At the end of June, Vermont Business Magazine received a tip that a sale was imminent. Alpert told VBM at the time that he does not comment on rumors.

Alpert said they eventually had five finalist bidders who came to Vermont.

The ultimate price was at the high end of the range their banker had estimated.

But, "We did not pick the offer with the highest price," he said, while conceding the obvious, "They paid a good price."

Agilent has a strong cultural fit with BioTek and, "Agilent has made a real commitment to the employees," Alpert said. "They care deeply about the welfare of our employees."

And, he said, they care about Vermont and the 50-year legacy of the company, which was founded by Alpert's father, Dr Norman Alpert, a University of Vermont physiologist. Briar Alpert's older brother Adam is a recently retired executive of the company.

Agilent to Acquire BioTek, Strengthening Leadership Position in Growing Cell Analysis Segment

Highlights: 

  • Combined portfolio enables Agilent to provide a more complete and integrated solution for customers in the important and fast-growing area of live cell analysis
  • BioTek is a recognized leader for plate-readers and imaging systems with complementary offerings to Agilent’s portfolio
  • Excellent growth potential; acquisition positions Agilent well in the large and growing immuno-oncology and immunotherapy markets and expands the company’s presence in biopharma, academia and research
  • Strong profitability, expected to be immediately accretive to non-GAAP earnings and compounding growth thereafter

Commonly with such an acquisition, one competitor buys another, but such was not the case here. In their partnership, for instance, Agilent was working on cell metabolism, while BioTek had the imager that could work with the research Agilent was undertaking.

BioTek has been growing two-to-three times the rate of the market segment overall, Alpert said.

Not only will the company grow with a larger global footprint, Alpert said he anticipates employment growth locally.

"The biggest change, after the close," Alpert said, "I will no longer be the CEO."

As a consultant in the short-term, he'll make sure that the "secret ingredients" that makes BioTek what it is has not been lost.

Todd Christen, an Agilent executive, will move to Vermont and run the company going forward.

"I'm so proud of what we've all accomplished together," Alpert said. "I'm especially proud of the employees."

Alpert, his wife and two girls will continue to live here. He's on the board of the University of Vermont, from which his father transfered the technology to what has become one of the state's great success stories. He also is on the board of the Center for Emerging Technologies.

"I have a real commitment and loyalty to Vermont," he said. "My wife loves it here. She's half Norwegian. She already believes she lives in the South."

Mike McMullen, Agilent president and CEO

In a statement released with the announcement Thursday morning, Mike McMullen, Agilent president and CEO, said: “BioTek represents a strong strategic fit with Agilent. The combination of these two companies will accelerate our multi-year growth strategy to expand our position in cell analysis. This is another example of Agilent investing in high-growth segments of the life sciences market to serve new and existing customers. Agilent is committed to continuing operations in Vermont and retaining the great team of nearly 500 employees that have been at the core of BioTek’s 50-year history of excellence and success.” 

“BioTek and Agilent have already been in partnership for over a year, successfully unlocking significant value through joint development of customer solutions,” Alpert said. “Both companies share the same focus on customers and employees, as well as a similar purpose, mission and values. I am confident that this is the winning formula for our employees and customers around the world.”  

Expanding Portfolio and Leadership in Cell Analysis

Agilent entered the cell analysis segment in 2015 with the acquisition of Seahorse Bioscience, a leader in providing specialized instruments and live-cell, kinetic assays. Agilent Seahorse XF technology was a leap in the evolution of cellular metabolism analysis, allowing researchers to better understand metabolic profiles in live cells.

In January 2018 Agilent broadened its portfolio of cell analysis solutions through the acquisition of Luxcel Biosciences. Luxcel’s assays use soluble sensors to analyze metabolism, making them a perfect complement to Agilent’s Seahorse XF technology, providing researchers with more options to analyze live-cell metabolism. 

In September 2018, Agilent differentiated its portfolio further through the acquisition of ACEA Biosciences, a pioneer in the development and commercialization of high- performance cell analysis platforms for life science research. Upon closing, Agilent’s cell analysis business will be in excess of $250 million in annual revenues.

“By combining BioTek’s offerings with Agilent’s, we will deliver a breadth of differentiated workflows, enabling customers to obtain deeper, more reliable insights across a variety of cell analysis applications,” said Jacob Thaysen, president of Agilent’s Life Sciences and Applied Markets Group. “This positions Agilent well in the large and growing immuno-oncology and immunotherapy markets and expands our presence in biopharma, academia and research as customers seek to understand complex cellular environments and interactions.”

About BioTek

BioTek, headquartered in Winooski, VT, USA, founded in 1968, is a worldwide leader in the design, manufacture, and distribution of innovative life science instrumentation. Its comprehensive product line includes cell imaging systems, microplate readers, washers, dispensers, automated incubators and stackers. These products enable life science research by providing high performance, cost-effective analysis and quantification of biomolecules, biomolecular interactions and cellular structure and function across diverse applications. BioTek espouses a "Think Possible" approach that sets the tone for fresh ideas, unsurpassed customer service and original innovations. 

About Agilent Technologies  

Agilent Technologies Inc. (NYSE: A) is a global leader in life sciences, diagnostics and applied chemical markets. With more than 50 years of insight and innovation, Agilent instruments, software, services, solutions and people provide trusted answers to customers' most challenging questions. The company generated revenues of $4.91 billion in fiscal 2018 and employs 15,550 people worldwide. Information about Agilent is available at www.agilent.com

Source: BioTek. Agilent. Winosski, Vermont, 7.11.2019.