Life Tech Sheds Spectrometry Operations To Focus On Core Business
2009年9月3日 - 12:48AM
Dow Jones News
Life Technologies Corp. (LIFE) is exiting the mass-spectrometry
business, used in molecular analysis, in order to focus on selling
biotechnology-related tools with higher margins and profits in the
wake of last year's merger that created the company.
The Carlsbad, Calif.-based medical-technology company is selling
its 50% stake in a joint venture called AB Sciex to partner Danaher
Corp. (DHR) for $450 million. Many on Wall Street had expected Life
Technologies to exit the business as it was accounted for as "other
income" in its financial results.
AB Sciex makes mass spectrometers, which are machines used in
laboratories to identify the components of a molecule or compound.
The machines are used in drug discovery and development, blood and
food testing, and many other areas of scientific research.
But Life Technologies is focusing its future business on selling
analytical instruments used in biotechnology that require the use
of high-margin consumable reagents. Unlike mass spectrometry, such
a business model provides a steady stream of sales for the company
after selling the machine, much like the add-on sales of razor
blades for use with a razor.
"While a joint venture was once the right structure to combine
corporate capabilities and launch this business, it is no longer
the best approach to win in a more matured competitive mass spec
industry," Life Technologies' Chief Executive Gregory Lucier said
during a conference call Wednesday.
Danaher, a Washington D.C.-based conglomerate, is taking full
control of the venture by also acquiring MDS Inc.'s (MDZ)
analytical-technologies business and the other 50% stake in AB
Sciex for $650 million.
Shares of MDS rose 23% to $7.22; Danaher was up 2.3% to $61.88
and Life Technologies stock gained 17 cents to $44.66.
Life Technologies was created last year after Invitrogen Corp.
bought Applera Corp.'s Applied Biosystems Group for $6.7
billion.
On Wednesday, the company backed its synergy targets from that
deal of $95 million in 2009 and $175 million by 2011. It also
continues to expect 2009 per-share earnings of $2.70 to $2.80,
excluding items, along with double-digit percentage growth in
per-share earnings in the "next several years."
Wall Street currently expects 2009 earnings of $2.77 a share and
EPS growth of 13% in 2010 and 12% in 2011, according to Thomson
Reuters.
Life Technologies expects to use the $290 million in net
proceeds from the deal with Danaher to pay down debt.
Cowen & Co. analyst Doug Schenkel wrote that the sale price
for the business was "low but reasonable," noting that sales from
the operations were expected to grow only by 3% a year and that the
structure of the venture may have made it difficult to find a
buyer.
"The [venture's] dependence on pharma spending made it difficult
to have confidence in a quick turnaround," Schenkel said.
-By Thomas Gryta, Dow Jones Newswires; 212-416-2169;
thomas.gryta@dowjones.com