Meridian Bioscience, Inc. (NASDAQ: VIVO), a provider of diagnostic
testing solutions and life science raw materials, today announced
it has entered into a definitive agreement to acquire the business
of GenePOC Inc., a Quebec City, Quebec, Canada based provider of
molecular diagnostic instruments and assays. Founded in 2007,
GenePOC has approximately 100 employees and generated total
revenues of less than $1 million in calendar 2018. Meridian has
agreed to make a cash payment at closing of the transaction of $50
million with future payments totaling up to an additional $70
million contingent upon the successful achievement of certain
technical development milestones and sales thresholds.
Strategic Fit and Rationale
With the acquisition, Meridian will be getting
GenePOC’s state-of-the art revogene™ molecular diagnostics
platform, which offers sample to result testing for single tests,
as well as flexible multiplexing capability. The Company believes
revogene™ is a perfect fit with Meridian’s stated strategy to
provide gastrointestinal disease and core respiratory illness
diagnostics solutions for the diverse needs of complex medical
health systems. revogene™ is an FDA-cleared platform that
currently has three FDA-cleared assays, including C. difficile,
Group A Strep, and Group B Strep. Those three assays comprise a
vast majority of Meridian’s current total molecular diagnostics
sales, thus enabling it to immediately offer this new platform and
technology to existing customers seeking better workflow and less
hands-on time than Meridian’s current Alethia™ molecular
platform can provide. Over time, through its multiplexing
capability, revogene™ is expected to allow Meridian to also
offer its customers smart panel solutions currently in development
and planning.
Jack Kenny, Chief Executive Officer, commented,
“We are very excited to be adding the GenePOC technology and team
to Meridian. GenePOC provides an exciting new state-of-the-art
molecular diagnostics platform to our Diagnostics portfolio. This
is a critical element of our strategy to re-position our
Diagnostics business for sustainable long-term growth. GenePOC’s
revogene™ platform is an excellent fit for our customers and
strategy to offer gastrointestinal-focused and other targeted
diagnostic solutions to meet the diverse needs of today’s more
complex health care system. We welcome the GenePOC team to the
Meridian family and look forward to leveraging Meridian’s strong
and established commercial infrastructure to offer
revogene™ and its menu of assays to our current and new
customers.”
Summary Transaction Terms and
ImpactThe cash-free/debt-free purchase price has a maximum
potential value of $120 million, with $50 million to be paid at
closing (subject to a holdback and working capital adjustment),
subsequent payments of up to $20 million in Meridian’s fiscal 2021
based on the achievement of certain technical development
milestones, and a final payment of up to $50 million in fiscal 2023
based on both the sales performance of certain molecular assays and
their achievement of minimum profit margin thresholds.
Excluding amortization expense, the Company
expects the transaction to add approximately $4 - $5 million in
operating expenses in fiscal 2019 and $9 - $10 million in fiscal
2020, both net of planned cost synergies. R&D Teams in both
Quebec City and Cincinnati will continue and ramp up work to
develop new assays for revogene™ and meaningfully expand the
menu of product offerings. As a result, the Company expects R&D
expense in the Diagnostics business to increase to the mid-teens as
a percent of sales. The Company expects the transaction to provide
a net positive contribution to run rate molecular sales and Company
EBITDA starting in fiscal 2021.
The transaction is subject to certain closing
conditions of a transaction of this nature. PNC Bank has committed
financing and will lead with Fifth Third Bank a transaction for a
new $125 million revolving line of credit to finance the
acquisition and re-finance Meridian’s current outstanding debt. The
acquisition will also be financed with cash. The Company expects
the transaction to close no later than early fourth quarter of
fiscal 2019.
Conference Call Meridian is
holding a conference call at 10:00 a.m. Eastern Time today to
review the transaction and answer questions, as well as report its
fiscal second quarter results. To participate in the live call by
telephone from the U.S., dial (866) 443-5802, or from outside the
U.S., dial (513) 360-6924, and enter the audience pass code
3893028. A replay will be available for 14 days beginning at 1:00
p.m. Eastern Time on April 30, 2019 by dialing (855) 859-2056 or
(404) 537-3406 and entering pass code 3893028.
Cautionary Statement Regarding Forward-Looking
Statements
Certain statements in this communication
regarding the proposed acquisition of the business of GenePOC by
Meridian, including any statements regarding the synergies,
benefits and opportunities of the transaction, future opportunities
for the combined company and products, future financial performance
and any other statements regarding Meridian's future expectations,
beliefs, plans, objectives, financial conditions, assumptions or
future events or performance that are not historical facts are
"forward-looking" statements made within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The words
"anticipate," "believe," "ensure," "expect," "if," "intend,"
"estimate," "probable," "project," "forecasts," "predict,"
"outlook," "aim," "will," "could," "should," "would," "potential,"
"may," "might," "anticipate," "likely," "plan," "positioned,"
"strategy," and similar expressions, and the negative thereof, are
intended to identify forward-looking statements.
All forward-looking information is subject to
numerous risks and uncertainties, many of which are beyond the
control of Meridian, that could cause actual results to differ
materially from the results expressed or implied by the statements.
These risks and uncertainties include, but are not limited to: the
diversion of management time on transaction-related issues; ability
to successfully integrate the businesses; risk that the transaction
and its announcement could have an adverse effect on the parties’
ability to retain customers and retain and hire key personnel; the
risk that any potential synergies from the transaction may not be
fully realized or may take longer to realize than expected; and
risks inherent in funding, developing and obtaining regulatory
approvals of new, commercially-viable and competitive products. In
addition, forward-looking statements may also be adversely affected
by general market factors, competitive product development, product
availability, federal and state regulations and legislation, the
regulatory process for new products and indications, manufacturing
issues that may arise, patent positions and litigation, among other
factors. The forward-looking statements contained in this
communication may become outdated over time. Meridian does not
assume any responsibility for updating any forward-looking
statements. Additional information concerning these and other
factors can be found in Meridian's filings with the SEC and
available through the SEC's Electronic Data Gathering and Analysis
Retrieval system at www.sec.gov, including Meridian's most recent
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K. The foregoing list of important
factors is not exclusive. Meridian assumes no obligation to update
or revise any forward-looking statements as a result of new
information, future events or otherwise, except as may be required
by law. Readers are cautioned not to place undue reliance on these
forward-looking statements that speak only as of the date
hereof.
About Meridian Bioscience,
Inc.
Meridian is a fully integrated life science
company that develops, manufactures, markets and distributes a
broad range of innovative diagnostic products. We are dedicated to
developing and delivering better solutions that give answers with
speed, accuracy and simplicity that are redefining the
possibilities of life from discovery to diagnosis. Through
discovery and development, we provide critical life science raw
materials used in immunological and molecular tests for human,
animal, plant, and environmental applications. Through diagnosis,
we provide diagnostic solutions in areas including gastrointestinal
and upper respiratory infections and blood lead level testing. We
build relationships and provide solutions to hospitals, reference
laboratories, research centers, veterinary testing centers,
physician offices, diagnostics manufacturers, and biotech companies
in more than 70 countries around the world.
Meridian’s shares are traded on the NASDAQ
Global Select Market, symbol VIVO. Meridian’s website address is
www.meridianbioscience.com.
Contact:Jack KennyChief Executive
OfficerMeridian Bioscience, Inc.Phone: 513.271.3700Email:
mbi@meridianbioscience.com
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