PerkinElmer continues M&A path with $5.25bn BioLegend deal

PerkinElmer is set to add antibody and reagent supplier BioLegend in a deal that analysts say could transform its Discovery and Analytical Solutions (DAS) business into a high growth segment.

The acquisition announced yesterday and expected to close by the end of the year will see life sciences giant PerkinElmer pay $5.25 billion – including $2.2 billion in stock consideration – for private antibody and reagent developer BioLegend.

The proposed deal xpands PerkinElmer into the “fast growing, high margin, antibody focused markets [and] increases PerkinElmer’s overall mix of recurring revenue,” the firm said on a call yesterday, adding the merged entity will create a $1.5 billion plus life science franchise with  around $700 million in life science research reagent revenue by 2022.

Image: iStock/AndreyPopov

The deal is focused on “gaining momentum in emerging, high-growth areas of proteogenomics, recombinant proteins, and bioprocessing,” the company added.

San Diego, California-based BioLegend employs over 700 staff and serves more than 10,000 academic and biopharma-related customers in 130 countries. The company’s estimated 2022 revenues stand at around $380 million.

Upon joining PerkinElmer, BioLegend’s campus “will become PerkinElmer’s global Center of Excellence (CoE) for research reagent content development for the combined company.”

Evercore ISI analyst Vijay Kumar welcomed the news noting that the deal could “transform the company’s DAS segment into a high single-digit (HSD) growth segment. At ~14x current year ‘22 revenues, the multiple paid was reasonable for an asset with 100% consumables and super high margins that is expected to grow at mid-teens.”

He continued: “At a high level, BioLegend provides antibodies – given that Becton Dickinson and Thermo Fisher play in these markets, some had questions around sustainability of growth.

“First, BioLegend’s historical ~20% growth rate should give comfort around execution. Second, not all antibodies are the same – BioLegend primarily plays in conjugated antibody space, which is more differentiated / harder to manufacture vs primary antibody market. These conjugated antibodies are used in a variety of applications, including proteogenomics, single cell research and bioprocessing.”

M&A history

The planned acquisition is the latest – and the largest – for PerkinElmer.

In May, the firm shelled out $260 million in cash for Nexcelom, bolstering its preclinical portfolio and cell and gene therapy manufacturing capabilities.

The same month, the firm acquired diagnostics firm Immunodiagnostic Systems Holdings for $155 million, two months after closing the acquisition of diagnostics firm Oxford Immunotec Global.

And late last year, Horizon Discovery Group was snapped up for $383 million, bringing gene editing and RNAi tech to PerkinElmer’s offering.