(Adds details, CEO interview, background, share price)
By Bill Berkrot
NEW YORK, Oct 1 (Reuters) - PerkinElmer Inc (PKI.N) said on Monday it has agreed to buy ViaCell Inc VIAC.O for $300 million in deal that will expand its fast-growing genetic screening business with the addition of ViaCell’s umbilical cord blood preservation technology.
Under the terms of the deal, already approved by the boards of both companies, PerkinElmer will pay $7.25 per share for all of ViaCell’s outstanding shares. ViaCell shares closed at $4.77 on Nasdaq on Monday.
PerkinElmer said the deal, which is expected to close in the fourth quarter of 2007, will knock 3 cents to 5 cents per share off its 2008 earnings, but add 2 cents to 3 cents per share in 2009, excluding items.
PerkinElmer expects to sell ViaCell’s therapeutic businesses, unloading its expensive research and development operations. Sales of ViaCell’s ViaCord technology for the preservation of umbilical cord blood are expected to be in the mid- to high-$60 million range in 2007.
That is expected to grow by at least 20 percent per year, PerkinElmer Chief Executive Gregory Summe said in an interview.
“We think this is a very important investment for our genetic screening business. ViaCell extends our product range on the neonatal side,” he said.
He said the cord blood stem cells can be used to treat or cure some 40 diseases, such as sickle cell anemia, and that the ViaCord technology is complementary to existing PerkinElmer products.
“We screen for these diseases and then we have the capability to help patients cure themselves with the stored cord blood,” Summe said.
The acquisition comes with a sales force of more than 50, which will extend PerkinElmer’s reach into obstetricians’ offices. ViaCell also has a direct-to-consumer marketing operation, Summe said.
The ViaCell purchase marks the fourth acquisition for PerkinElmer this year. The Waltham, Massachusetts-based scientific instruments maker made eight small acquisitions last year.
“This does three things for us,” Summe said. “It extends the product range in neonatal; it adds very good additional sales channel capability in the prenatal space and it adds greater scale to the overall genetic screening business.”
PerkinElmer shares closed up 65 cents, or 2.2 percent, at $29.86 on the New York Stock Exchange prior to the ViaCell announcement.