Brooks buys into biobanking
Automation company announces purchase of Nexus Biosystems
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CHELMSFORD, Mass.—Brooks Automation Inc. has completed the acquisition of Nexus Biosystems Inc., a Poway, Calif.-based automated compound and sample management company. The net cash purchase price was $79 million. In addition, Brooks paid approximately $6.7 million for the value of the unrestricted cash held by Nexus at closing.
For the trailing 12 months ended June 30, Nexus generated revenues of $36 million and was the largest company in its market, according to Brooks.
"Brooks spent many months investigating the biobanking space and concluded that Brooks' core expertise in creating cold and providing automation in controlled environments could be leveraged into this market space," says Martin Headley, the company's executive vice president and chief financial officer. "The market is attractive because of projected growth in excess of 20 percent driven by a recognition that sample volumes are overtaking manual equipment solutions; the increasing importance of personalized medicine with a need for more and more sophisticated sample storage; and the rapid growth of samples being stored. Biological samples under storage are growing at a CAGR of between 20 and 30 percent."
In addition, "Nexus has attractive financial attributes including a gross margin profile that is favorable to the Brooks average and modest fixed asset and working capital requirements. We will be making meaningful development expenditures in next-generation automated sample management products over the next 12 to 15 months that will moderate operating margins from the attractive levels we expect to see."
Headley adds that acquisition charges and R&D expenses will make the operation break even over the neat year but "nicely profitable" thereafter.
Brooks, with a heritage in semiconductor equipment, had no market presence or customer intimacy in biobanking and concluded that the acquisition of leading players in this fragmented market would provide the base from which to introduce Brooks' technologies to meet increasingly demanding customer requirements.
"Nexus represents an important next step in our strategy to build a meaningful position in a rapid, secular growth market," states Dr. Steve Schwartz, Brooks' president & CEO. "Together with our other recent acquisition, RTS Life Sciences, and our core technical competencies at Brooks, we plan to build Brooks Life Science Systems (BLSS) into the market and innovation leader in biobanking and compound sample management. With Nexus' operations on the West Coast and meaningful sales and service locations in Switzerland, Japan and Germany complementing our existing Life Science Systems direct channel presence on the East Coast and in the U.K., we will have broad global reach. Nexus has developed a proven technology position in their systems, consumables and service offerings. Combined with RTS, they will have developed the leading installed base of automated biobanks and compound sample management systems placed in service over the past decade."
John Lillig, CEO of Nexus Biosystems, will lead the newly formed BLSS operation. He comments that "combining the technological and global support strengths of our two companies will help to accelerate the ongoing product development, commercialization and customer support of our expanding sample management solutions."
BLSS Senior Vice President Clint Harris, who was responsible for building the systems business over the past couple years, is moving to the San Diego area to join Lillig. While Brooks plans to enhance the resources put into research and development, it will also leverage its corporate infrastructure to rationalize the supporting infrastructure previously required by significant operations in California, Switzerland and the United Kingdom. BLSS will continue to have a presence in each of these locations, as well as continuing existing sales and service operations in Germany, Japan and on the East Coast in the United States.
Historically large pharmaceutical customers—including the 10 largest—and national labs such as the U.K. Biobank and Mayo Clinic have comprised the majority of sales for the BLSS companies. However, momentum is shifting to biological drug development companies as well as research institutes like the Broad Institute and the National Cancer Institute and research hospitals such as Children's Hospital of Philadelphia, UMC Groningen and Vanderbilt University Hospital. There are also interesting opportunities outside of traditional life sciences with existing customers such as the South African Police Force, Headley states.
For the trailing 12 months ended June 30, Nexus generated revenues of $36 million and was the largest company in its market, according to Brooks.
"Brooks spent many months investigating the biobanking space and concluded that Brooks' core expertise in creating cold and providing automation in controlled environments could be leveraged into this market space," says Martin Headley, the company's executive vice president and chief financial officer. "The market is attractive because of projected growth in excess of 20 percent driven by a recognition that sample volumes are overtaking manual equipment solutions; the increasing importance of personalized medicine with a need for more and more sophisticated sample storage; and the rapid growth of samples being stored. Biological samples under storage are growing at a CAGR of between 20 and 30 percent."
In addition, "Nexus has attractive financial attributes including a gross margin profile that is favorable to the Brooks average and modest fixed asset and working capital requirements. We will be making meaningful development expenditures in next-generation automated sample management products over the next 12 to 15 months that will moderate operating margins from the attractive levels we expect to see."
Headley adds that acquisition charges and R&D expenses will make the operation break even over the neat year but "nicely profitable" thereafter.
Brooks, with a heritage in semiconductor equipment, had no market presence or customer intimacy in biobanking and concluded that the acquisition of leading players in this fragmented market would provide the base from which to introduce Brooks' technologies to meet increasingly demanding customer requirements.
"Nexus represents an important next step in our strategy to build a meaningful position in a rapid, secular growth market," states Dr. Steve Schwartz, Brooks' president & CEO. "Together with our other recent acquisition, RTS Life Sciences, and our core technical competencies at Brooks, we plan to build Brooks Life Science Systems (BLSS) into the market and innovation leader in biobanking and compound sample management. With Nexus' operations on the West Coast and meaningful sales and service locations in Switzerland, Japan and Germany complementing our existing Life Science Systems direct channel presence on the East Coast and in the U.K., we will have broad global reach. Nexus has developed a proven technology position in their systems, consumables and service offerings. Combined with RTS, they will have developed the leading installed base of automated biobanks and compound sample management systems placed in service over the past decade."
John Lillig, CEO of Nexus Biosystems, will lead the newly formed BLSS operation. He comments that "combining the technological and global support strengths of our two companies will help to accelerate the ongoing product development, commercialization and customer support of our expanding sample management solutions."
BLSS Senior Vice President Clint Harris, who was responsible for building the systems business over the past couple years, is moving to the San Diego area to join Lillig. While Brooks plans to enhance the resources put into research and development, it will also leverage its corporate infrastructure to rationalize the supporting infrastructure previously required by significant operations in California, Switzerland and the United Kingdom. BLSS will continue to have a presence in each of these locations, as well as continuing existing sales and service operations in Germany, Japan and on the East Coast in the United States.
Historically large pharmaceutical customers—including the 10 largest—and national labs such as the U.K. Biobank and Mayo Clinic have comprised the majority of sales for the BLSS companies. However, momentum is shifting to biological drug development companies as well as research institutes like the Broad Institute and the National Cancer Institute and research hospitals such as Children's Hospital of Philadelphia, UMC Groningen and Vanderbilt University Hospital. There are also interesting opportunities outside of traditional life sciences with existing customers such as the South African Police Force, Headley states.
