Developer and manufacturer of purified proteins, Techne Corporation (TECH) (aka Bio-Techne) revealed that it will acquire Santa Clara, CA-based developer of proprietary systems and consumables for protein analysis, ProteinSimple for $300 million in cash.
The addition of ProteinSimple will be valuable to TECH as the former has produced the game changing instruments for analyzing proteins and improved the overall productivity of lab results.
ProteinSimple makes systems that help gaining insights about the nature of proteins. The company has achieved success through its Simple Western line of instruments, based on Western blotting. Western blotting (aka protein immunoblot) is a widely used life science analytical technique for detecting proteins in tissue homogenate or extract.
ProteinSimple’s recent instrument from the Simple Western line of instruments is Wes, which can deliver 25 Western blot results in less than 3 hours. ProteinSimple also offers high-throughput Western blotting instruments (Peggy Sue and Sally Sue), which further boost lab productivity.
ProteinSimple has a burgeoning revenue stream. In the last twelve months ended May 31, 2014, the company’s revenues totaled $57.1 million, up 30% from the prior year. Earnings before Interest, Taxes, Depreciation and Amortization (:EBITDA) were $7.9 million during the period. The company also has manufacturing operations in Canada and sales offices in Japan and China, and employs over 200 people.
TECH will finance the acquisition through a combination of cash on hand and a fresh revolving line of credit facility that will be obtained prior to the closing of the acquisition. The closing of the acquisition will be subjected to satisfaction of customary closing conditions, including the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Post-acquisition, ProteinSimple will continue to operate as a division of TECH under the leadership of Tim Harkness, the company's chief executive officer.
TECH manufactures purified proteins, particularly cytokines, antibodies, immunoassays and biologically active small molecule compounds. These products are sold to biomedical researchers and clinical research laboratories. Currently, it retains a Zacks Rank #2 (Buy).
Other stocks that are also worth a look in the medical instrument industry include Alphatec Holdings, Inc. (ATEC), Luminex Corporation (LMNX), and RTI Surgical Inc. (RTIX). All of them sport a Zacks Rank #1 (Strong Buy).
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