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Wired News – Charles River Labs Inked an Agreement to Acquire MPI Research

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LONDON, UK / ACCESSWIRE / February 15, 2018 / Active-Investors.com has just released a free research report on Charles River Laboratories International, Inc. (NYSE: CRL) ("Charles River"). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=CRL as the Company's latest news hit the wire. On February 13, 2018, the Company announced that it has signed an agreement to acquire MPI Research ("MPI"), a non-clinical contract research organization (CRO), for approximately $800 million in cash. Register today and get access to over 1,000 Free Research Reports by joining our site below:


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Deal Details

Charles River will fund the acquisition with available cash and credit facility. The transaction, expected to close in Q2 2018, is subject to regulatory approvals and customary closing conditions. MPI is expected to be reported as part of Charles River's Discovery and Safety Assessment segment.

Strategic Benefits

  • The agreement will enhance Charles River's position as a leading global early-stage CRO by strengthening its ability to partner with clients across the drug discovery and development continuum.
  • The acquisition aligns with the Company's strategy to expand its biotechnology client base. Also, MPI will add ototoxicity and abuse liability capabilities, and expand Charles River's existing capabilities in general toxicology and specialty toxicology, including ophthalmology, juvenile toxicity, molecular biology, and surgery as well as medical device testing.
  • MPI will provide safety assessment infrastructure to support Charles River's current demand and future growth needs. The addition of MPI will also enhance the Company's ability to achieve its long-term growth goals and generate attractive financial returns through profitable revenue growth and meaningful accretion to non-GAAP earnings per share (EPS).

Financial Specifics of the Agreement

The acquisition price implies multiples of 11.7x non-GAAP earnings before interest, tax, depreciation, and amortization (EBITDA) based on MPI's estimated 2017 results, and approximately 10.5x non-GAAP EBITDA based on the estimated 2018 results including operational synergies. The acquisition is expected to add $170 million to $190 million to Charles River's 2018 consolidated revenue based on the anticipated timing of the close, and $260 million to $280 million to 2019 consolidated revenue.

The transaction is expected to be accretive to non-GAAP EPS by approximately $0.25 in 2018 and approximately $0.60 in 2019. The Company expects to generate operational synergies as a result of the acquisition, with benefits totaling $13 million to $16 million by the end of 2019. Items excluded from non-GAAP earnings per share are expected to include all acquisition-related costs.

Financial and Legal Advisors

Morgan Stanley & Co. LLC is serving as the exclusive financial advisor to Charles River. Davis Polk & Wardwell LLP is acting as Charles River's transactional legal counsel and Axinn, Veltrop & Harkrider LLP is acting as antitrust counsel. Jefferies LLC and SunTrust Robinson Humphrey, Inc. are acting as financial advisors, and Weil, Gotshal & Manges LLP is serving as transactional legal counsel to MPI.

Charles River's Recent Acquisition

On January 11, 2018, the Company acquired KWS BioTest, a CRO specializing in in vitro and in vivo discovery testing services for immuno-oncology and inflammatory and infectious diseases, for approximately £15 million (approximately $20 million) in cash. The addition of KWS BioTest enhanced Charles River's discovery expertise, with complementary offerings that provided the Company's clients with additional tools in the active therapeutic research areas of oncology and immunology.

About Charles River Laboratories International, Inc.

Founded in 1947 and headquartered in Wilmington, Massachusetts, Charles River provides essential products and services to help pharmaceutical and biotechnology companies, government agencies and leading academic institutions around the globe accelerate their research and drug development efforts.

About MPI Research

MPI Research is a premier non-clinical contract research organization (CRO) providing comprehensive testing services to agricultural, environmental, biopharmaceutical, medical device, animal health, and chemical industries worldwide. The Company was founded in 1995 and is based in Mattawan, Michigan.

Stock Performance Snapshot

February 14, 2018 - At Wednesday's closing bell, Charles River Labs' stock advanced 2.46%, ending the trading session at $110.31.

Volume traded for the day: 1.24 million shares, which was above the 3-month average volume of 377.19 thousand shares.

Stock performance in the last month – up 4.30%; previous three-month period – up 8.22%; past twelve-month period – up 24.01%; and year-to-date - up 0.79%

After yesterday's close, Charles River Labs' market cap was at $5.14 billion.

Price to Earnings (P/E) ratio was at 26.94.

The stock is part of the Healthcare sector, categorized under the Medical Laboratories & Research industry. This sector was up 1.4% at the end of the session.


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