NEW YORK (Reuters) - PerkinElmer Inc’s (PKI.N) chief executive said a report that the company was deciding whether to put itself up for sale was not based on fact and “completely not true.”
“We are not putting the company up for sale. It’s not anything we talked about at the board level,” Robert Friel told Reuters in an exclusive telephone interview.
Friel was reacting to a Bloomberg report on Thursday that said the company had just missed out on buying much larger diagnostics company Beckman Coulter Inc BEC.N and was working with Bank of America as it decides whether to seek another acquisition or put itself up for sale.
“We are not working with Bank of America,” said Friel, who was in Pennsylvania for a family funeral. “This thought that we would now decide to position the company for sale is not based in fact.”
PerkinElmer’s shares jumped 7 percent with more than four times the average volume of shares trading on Thursday, prompting Friel to knock down the report even if it meant sending the share price lower.
“I saw the (Bloomberg) article and when I saw the volume of our stock today I felt we really needed to address it,” Friel said.
“In this case I think it’s probably the right thing to do because what I suspect is what is fueling the volume of the stock today is just not true.”
PerkinElmer shares did give back some of its gains in after-hours trading, falling to $26.99 from a New York Stock Exchange close at $27.72.
Friel declined to comment on the report that PerkinElmer was in the bidding for Beckman until the eleventh hour -- a deal that would have been many times larger that its typical acquisitions, and one that would have involved taking on significant debt. People familiar with the bidding told Reuters that PerkinElmer had been trying to buy Beckman.
Danaher Corp (DHR.N) eventually landed Beckman for $5.8 billion, nearly three times PerkinElmer’s annual revenue.
Asked if he would consider pursuing another deal of that size, Friel said, “In most cases when we look at larger transactions the risk aspects of the deal can sometimes outweigh the potential benefits,” Friel said.
“Something like that of that size would have to be a transaction that we felt really created significant value for our shareholders, that was something that was just so attractive that we felt we really needed to take a look at it,” he added.
PerkinElmer, which sells scientific instruments, medical testing equipment and environmental safety monitoring products, has historically made several acquisitions each year in the $50 million to $100 million range.
Friel said the company was eyeing somewhat larger deals.
“Our preference would be to start doing a little bigger than that. We got a couple in the pipeline that look pretty interesting that would be more in the couple hundred million range,” he said.
“We generate a lot of cash so we have fairly significant borrowing capacity, so we feel good about our financial position from the perspective of going out and doing these $100 to $200 million acquisitions to add to the capabilities of what we have. And I think that’s what you’ll see from us going forward,” Friel said.
His preference would be acquisitions in the areas of diagnostics, reagents and services and software, and deals that would expand the company’s geographic reach.
“The core strategy of the company is fundamentally based on smaller type bolt-on acquisitions,” he said.
Reporting by Bill Berkrot; Editing by Richard Chang