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Luminex acquires EraGen for $34 million
AUSTIN, Texas—Luminex Corporation, through the signing of a definitive agreement, will acquire privately-held EraGen Biosciences, Inc., a leader in the development of molecular diagnostic testing technologies for both infectious disease and genetic applications. Per the terms of the agreement, Luminex will purchase all of EraGen's outstanding shares for approximately $34 million in cash, subject to certain adjustments.
Luminex expects the acquisition to add between $5 million and $7 million to the company's 2011 consolidated revenue. EraGen generated about $8 million in product revenue last year. Luminex expects the transaction to be dilutive in 2011 on a GAAP basis, inclusive of purchase-related costs, and accretive to earnings in 2012. The company also expects to record charges for non-recurring cash and non-cash acquisition-related costs in terms of the acquisition. Completion of the deal is subject to customary closing conditions, as well as the approval of EraGen shareholders, and the acquisition is expected to close within the next few weeks.
"We are excited by the opportunity to expand our capabilities and product line in the important and rapidly growing infectious disease and molecular diagnostic markets with high growth, high margin, complementary assays," said Patrick J. Balthrop, president and CEO of Luminex, in a statement about the deal. "The acquisition of EraGen builds on the strategic investments we have made and provides additional resources for sales, support, and assay development, strengthening our leadership position and expanding our footprint within the molecular diagnostic market."
The acquisition complements Luminex's current areas of focus. EraGen's development, manufacturing and marketing of molecular reagent products and molecular diagnostic testing technologies meshes with Luminex's production of biological testing technologies. By acquiring EraGen, Luminex gains access to the company's portfolio of molecular diagnostic assays, which are based on EraGen's proprietary technology platform, MultiCode. The assay chemistry is a platform for real-time polymerase chain reaction (PCR) and multiplex PCR-based applications. The acquisition also allows Luminex to offer its products to EraGen's existing customer base.
"By acquiring EraGen, Luminex has significantly enhanced its competitive strength," said Irene Hrusovsky, M.D., president and CEO of EraGen Biosciences, in a press release regarding the acquisition. "As one of America's fastest growing companies, Luminex will benefit from EraGen's innovative technologies and expertise to penetrate new segments. I am confident that the company will realize significant business and technology synergies as Luminex brings the global reach and scale required to effectively leverage the enormous potential of EraGen's franchise in molecular diagnostics."
Some of EraGen's current products include the MultiCode-RTx Herpes Simplex Virus (HSV) 1&2 Kit for in-vitro diagnostic use, which is the first U.S. Food and Drug Administration-cleared PCR-based qualitative test for detecting and typing HSV-1 or HSV-2 from vaginal lesion swab specimens. EraGen also has several analyte specific reagents for detecting infectious agents, as well as research use only reagents for infectious diseases related to organ transplantation. The company has another MultiCode project in the works as well, the MultiCode-Plx Respiratory Virus Panel.
EraGen has about 70 employees at its Madison, Wis.-based facilities. Currently, Luminex expects to maintain EraGen's operations in Madison.