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Meridian Bioscience announced an agreement to acquire Quebec City-based GenePOC, a provider of molecular diagnostic instruments and assays.
Meridian Bioscience (NASDAQ:VIVO) announced an agreement to acquire Quebec City-based GenePOC, a provider of molecular diagnostic instruments and assays.
As quoted in the press release:
Jack Kenny, Chief Executive Officer, commented, “We are very excited to be adding the GenePOC technology and team to Meridian. GenePOC provides an exciting new state-of-the-art molecular diagnostics platform to our Diagnostics portfolio. This is a critical element of our strategy to re-position our Diagnostics business for sustainable long-term growth. GenePOC’s revogene platform is an excellent fit for our customers and strategy to offer gastrointestinal-focused and other targeted diagnostic solutions to meet the diverse needs of today’s more complex health care system. We welcome the GenePOC team to the Meridian family and look forward to leveraging Meridian’s strong and established commercial infrastructure to offer revogene and its menu of assays to our current and new customers.”
Summary Transaction Terms and Impact
The cash-free/debt-free purchase price has a maximum potential value of US$120 million, with US$50 million to be paid at closing (subject to a holdback and working capital adjustment), subsequent payments of up to US$20 million in Meridian’s fiscal 2021 based on the achievement of certain technical development milestones, and a final payment of up to US$50 million in fiscal 2023 based on both the sales performance of certain molecular assays and their achievement of minimum profit margin thresholds.Excluding amortization expense, the Company expects the transaction to add approximately US$4 – US$5 million in operating expenses in fiscal 2019 and $9 – $10 million in fiscal 2020, both net of planned cost synergies. R&D Teams in both Quebec City and Cincinnati will continue and ramp up work to develop new assays for revogene and meaningfully expand the menu of product offerings. As a result, the Company expects R&D expense in the Diagnostics business to increase to the mid-teens as a percent of sales. The Company expects the transaction to provide a net positive contribution to run rate molecular sales and Company EBITDA starting in fiscal 2021.