Acquiring an acquirer: Millipore expands with Serologicals

After a string of acquisition including Innovata’s gene expression technology and the companies LINCO and Cytomyx, Atlanta-based Serologicals Corp. is itself being acquired by Millipore Corp. in a $1.4 billion deal.

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BILLERICA, Mass.—After a string of acquisition moves since the fall—buying up Innovata's gene expression technology and acquiring the companies LINCO and Cytomyx—Atlanta-based Serologicals Corp. is itself being acquired by Millipore Corp.
Millipore too has been in a buying mood lately, with acquisitions of Newport Bio Systems, NovAseptic AB and MicroSafe, B.V. Those deals, all brokered in the past year, are part of a strategic growth plan launched in 2005, but the Serologicals deal—valued at $1.4 billion—holds a special place in the hearts of Millipore's leaders.
The reason? Millipore's growth plan has five strategic goals: Strengthen leadership position with biopharmaceutical customers, become a strategic supplier in bioscience research markets, lead industry in product quality and manufacturing effectiveness, become a magnet for talent, and double the value of the company by 2009.
"Those five principles really are the filter through which we run all our decisions right now, and those goals are really the catalysts for our M&A initiatives over the past year or so," says Charlie Wagner, vice president of strategy and corporate development for Millipore. "If you look at Serologicals, it is the only target thus far that is uniquely positioned to help us achieve each and every one of those five objectives."
The combination of Millipore and Serologicals will significantly strengthen Millipore's Bioscience division by giving it key market positions in a range of high-growth segments such as drug discovery products and services, antibodies, cell biology reagents, and stem cell research. Millipore reports that it expects to increase sales of Serologicals' products in international markets such as Europe and Asia, where Millipore has a significant presence.
Millipore's other business segment, the Bioprocess division, will also gain in the deal by getting a cell culture supplements offering that will enable it to enter into the estimated $1 billion upstream bioprocessing market.
"The addition of cell culture supplements to our Bioprocess division will make Millipore the only company in the industry that can provide upstream cell culture and downstream separation offerings to our biopharmaceutical customers," maintains Martin Madaus, the chairman, president, and CEO of Millipore. "Our comprehensive offering will include process development and scale-up, upstream processing, downstream filtration, and ongoing compliance monitoring and testing."
Madaus calls the acquisition of Serologicals "transformational" and adds that Serologicals and Millipore are two of the fastest growing companies in their market sector. The addition of Serologicals' R&D capabilities should also enable the combined company to pursue new markets, he predicts.
"We believe that our combination with Millipore represents an excellent opportunity to achieve attractive long-term growth, enhance product development, and develop a closer partnership with all of our customers in the life sciences and biopharmaceutical markets," says David A. Dodd, president and CEO of Serologicals. "Millipore is one of the most respected franchises in the life science industry and joining an industry leader will create opportunities for Serologicals employees, as part of the larger, combined organization."
As Wagner notes, the bioscience market is very competitive, with Invitrogen and ABI among the combined company's chief competitors. "Those competitors have good businesses and compete directly with us in some areas but only indirectly in others," he says. "We feel our business combination will give us some uniqueness, as well as the size necessary to be competitive in the long term."
Dodd plans to assist in the integration of the two companies—a process that has no firm timeline as yet—and will then depart from the company. The combined organization will number approximately 5,800 employees, roughly 1,000 coming from Serologicals.
Under the terms of the agreement, Serologicals shareholders will receive $31.55 in cash for each share of Serologicals common stock they own. The transaction is expected to close on or about June 30.

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