BioMerieux buys diagnostics rival BioFire for $450 mln
PARIS, Sept 4
PARIS, Sept 4 (Reuters) - French biotech firm BioMerieux will buy privately-owned U.S. rival BioFire Diagnostics for $450 million, in a deal aimed at consolidating its position as a major player in infectious disease diagnostics.
BioMerieux, which makes tests to detect diseases and to check the quality of food, water and cosmetics, said late on Tuesday it would buy BioFire, a 23-year-old Salt Lake City company specialising in molecular biology whose products can detect viral and bacterial infections in a single test.
The deal, which is due to close by early 2014, is the latest sign of a trend in the pharmaceutical industry toward the use of sophisticated biotechnologies as a way to better identify the causes of diseases and design more targeted treatments.
"We believe that the deal has several important strategic merits for BioMérieux," Berenberg bank wrote in a note to clients on Wednesday, noting it reinforced BioMerieux's molecular diagnostics business and strengthened its presence in North America.
However, the price for BioFire was not cheap, Berenberg said, noting that BioMerieux, which is funding the deal through debt, is paying 6.4 times the sales BioFire is expected to generate this year.
Furthermore, BioFire is currently loss-making and BioMerieux expects the deal to have a dilutive effect on its operating income before non-recurring items for the next two years, though it would add 1-2 percent to its organic growth over 2015-2017.
BioMerieux separately posted first-half earnings before tax, depreciation and amortisation down 1.7 percent from a year ago at 169 million euros ($222 million) on sales of 754 million.
Shares in BioMerieux, which have risen over 8 percent so far this year, were up 0.84 percent at 1020 GMT to 78 euros.