FRANKFURT (Reuters) - U.S. laboratory products supplier Avantor has agreed to buy German peer Ritter for 890 million euros ($1.1 billion) in cash, adding to a wave of dealmaking in the sector.
Ritter, which makes robotic and liquid-handling consumables for laboratories such as racks, dispensers and cartridges, saw demand for its products - including those used for COVID-19 PCR tests - rise sharply in the pandemic.
In the same sector, Italy’s DiaSorin has announced plans to buy U.S. rival Luminex, while Roche is acquiring U.S.-based GenMark Diagnostics, and German labs group Synlab said it would list on the stock exchange.
The pandemic has fuelled rapid growth at some lab suppliers, but as the rollout of COVID-19 vaccines progresses, some analysts have raised concern about a possible drop in demand for COVID-19 molecular tests once the emergency is over.
Ritter’s family owners months ago started to scout the market for potential partners to finance its global expansion, people familiar with the matter had said in February.
Avantor said the transaction comes in the wake of 40 completed M&A deals, in which it deployed more than $8 billion in capital and generated well over $350 million in synergy benefits measured on the basis of core earnings or EBITDA.
The transaction, which Avantor is financing available cash on hand and use of incremental term loans, is expected to be immediately accretive to adjusted earnings per share (EPS) upon closure, which is expected in the third quarter, the company said.
Jefferies and Centerview, as well as Schilling, Zutt & Anschütz, advised Avantor, while Goldman Sachs, Carlsquare and Gleiss Lutz advised Ritter, with Citi financing the transaction.
($1 = 0.8394 euros)
Reporting by Arno Schuetze; Editing by David Holmes
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