QIAGEN Inc. (JOBS) Acquires Corbett Life Science for $66 Million
Published: Jul 01, 2008
Corbett is best known for having developed the world's first rotary real-time PCR cycler system -- the Rotor-Gene(tm) -- a system used to detect real-time polymerase chain reaction (PCR) reactions which make specific sequences of DNA and RNA targets visible through amplification and quantifiable through real-time measurement of such amplification. The addition of this proprietary PCR detection technology extends QIAGEN's molecular testing solution portfolio and enhances QIAGEN's options to offer sample and assay technology solutions spanning from sample to result.
``We are pleased to offer our customers the choice of a superior platform of technologies for the entire workflow process -- from sample to result,'' said Peer Schatz, Chief Executive Officer of QIAGEN. ``Corbett technologies are excellent complements to our portfolio of current and future molecular testing solutions, including our modular processing platform QIAsymphony. We expect this transaction to contribute significantly to our leading positions in molecular diagnostics, applied testing, pharmaceutical and clinical research as well as academic research.''
Molecular testing is performed in three steps: 1) sample preparation, 2) assay setup and 3) detection. QIAGEN has leading positions in the first two steps and for the third step, detection, has historically designed its leading portfolio of PCR-tests and technologies for use on systems from various vendors, including Corbett's Rotor-Gene cycler systems. As such, QIAGEN's instruments, consumables, and a number of regulated tests are already optimized for use with Corbett instruments. Although QIAGEN will continue its open platform strategy to offer tests for use on third-party detection systems, it will significantly increase the focus of new developments of its regulated tests, platforms, and testing technologies for use with the Rotor-Gene and successor systems which are currently in development.
Corbett has built a leading position in instrumentation used to perform PCR analyses. Its primary product families are the Rotor-Gene real-time PCR cycler and the CAS benchtop robots.
Unlike other PCR cyclers, the Rotor-Gene uses a unique centrifugal rotary design and is ideal for even the most demanding requirements of real-time thermo-optical analyses. It has a broad optical range, with six channels spanning UV to infra-red wavelengths, proven near-perfect well-to-well thermal and optical uniformity and a fast data acquisition rate, all features which are essential for applications from standard to very advanced. The CAS benchtop robots are designed to prepare molecular tests (assay setup) and are an excellent fit with QIAGEN products such as the QIAcube and the Biorobot EZ1.
``The fit with QIAGEN is tremendous and will be very beneficial for customers of both companies,'' John Corbett Junior said. ``We have a long-standing relationship with QIAGEN and QIAGEN already has more than 30 molecular diagnostic assays optimized for the Corbett Rotor-Gene PCR cycler.* Many of our customers are QIAGEN customers as well. In addition, QIAGEN's technology leadership in molecular sample and assay technologies, its global reach and extensive marketing, combined with strong relationships with researchers and leading laboratories around the world, bring exciting opportunities for Corbett.''
Under the terms of the agreement, QIAGEN has acquired the entire outstanding stock of Corbett for the consideration described above. This consideration includes the purchase of 82.5% of the outstanding stock of Corbett as well as the exercise of an exclusive purchase option for the remaining 17.5% of the outstanding stock of Corbett.
QIAGEN expects to incur one-time charges of approximately US$0.02 in EPS in the third quarter 2008 in connection with this acquisition. These charges primarily relate to in-process research and development and the write-off of certain assets. In addition, based on preliminary analyses and following the streamlining of Corbett's product portfolio, QIAGEN expects this transaction to contribute approximately US$14 million in sales in the second half of 2008 and approximately US$40 million in sales for the full year of 2009. On an adjusted basis excluding one-time charges, integration and restructuring costs, and amortization of acquisition related intangible assets, the acquisition is expected to be dilutive by approximately US$0.02 to EPS in the second half of 2008 and to be neutral in 2009. Beyond 2009, it is expected that the acquisition will contribute significant accretion to net income.
Financial highlights of the acquisition:
-- QIAGEN acquires the entire outstanding stock of Corbett for US$66 million in cash (subject to certain customary purchase price adjustments), US$4 million in restricted QIAGEN common stock and up to approximately US$65 million in milestone payments and other contingencies over the next four years.
-- Expected to add revenues of approximately US$14 million in the second half of 2008 and approximately US$40 million in sales for the full year of 2009.
-- Expected one-time charges of approximately US$0.02 in EPS in the third quarter 2008.
-- Expected to be dilutive by approximately US$0.02 to adjusted EPS in 2008 and neutral in 2009, accretive thereafter.
-- No material change to QIAGEN's expected margins in 2009 and thereafter.
Corbett Life Science founders John Corbett Senior and John Corbett Junior will both assume advisory roles at QIAGEN.
* Subject to regulatory approvals, certain QIAGEN molecular diagnostic test kits are not available for clinical diagnostic use in the United States and other countries.
QIAGEN N.V., a Netherlands holding company, is the leading provider of sample and assay technologies. Sample technologies are used to isolate and process DNA, RNA, and proteins from biological samples such as blood or tissue. Assay technologies are used to make such isolated biomolecules visible. QIAGEN has developed and markets more than 500 consumable products as well as automated solutions for such consumables. The company provides its products to molecular diagnostics laboratories, academic researchers, pharmaceutical and biotechnology companies, and applied testing customers for purposes such as forensics, animal or food testing, and pharmaceutical process control. QIAGEN's assay technologies include what is considered to be the broadest panel of molecular diagnostic tests available worldwide. This panel includes the only FDA-approved test for human papillomavirus (HPV), the primary cause of cervical cancer. QIAGEN employs more than 2,700 people in more than 30 locations worldwide. Further information about QIAGEN can be found at http://www.qiagen.com.
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About Corbett Life Science
Corbett Life Science is the parent company of a group of biotechnology companies that design, manufacture and internationally distribute instrumentation systems for the life sciences. The company is headquartered in Sydney and employs a staff of approximately 130 in four locations on three continents, most of them in Australia. Since 1988, Corbett has earned a reputation for innovative, versatile, robust, and easy-to-use products that generate strong customer loyalty. The company is most recognized for developing the world's first rotary real-time DNA amplification system -- the Rotor-Gene(tm). The Rotor-Gene is the most thermally and optically precise real-time analyzer available. It also features high-speed data capture and the broadest optical range of any real-time instrument and now High Resolution Melt (HRM) capability. The renowned Rotor-Gene software now supports the widest application set. For more information, visit http://www.corbettlifescience.com.
SAFE HARBOR STATEMENT
Certain of the statements contained in this news release may be considered forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. To the extent that any of the statements contained herein relating to QIAGEN's products, markets, strategy or operating results are forward-looking, such statements are based on current expectations that involve a number of uncertainties and risks. Such uncertainties and risks include, but are not limited to, risks associated with management of growth and international operations (including the effects of currency fluctuations and risks of dependency on logistics), variability of operating results, the commercial development of the applied testing markets, clinical research markets and proteomics markets, nucleic acid-based molecular diagnostics market, and genetic vaccination and gene therapy markets, competition, rapid or unexpected changes in technologies, fluctuations in demand for QIAGEN's, products (including fluctuations due to the level and timing of customers' funding, budgets, and other factors), our ability to obtain regulatory approval of our infectious disease panels, difficulties in successfully adapting QIAGEN's products to integrated solutions and producing such products, the ability of QIAGEN to identify and develop new products and to differentiate its products from competitors' products, market acceptance of QIAGEN's new products and the integration of acquired technologies and businesses. For further information, refer to the discussions in reports that QIAGEN has filed with, or furnished to, the U.S. Securities and Exchange Commission (SEC).
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Source: QIAGEN N.V.