Financial terms were not disclosed. The acquisition is subject to customary closing conditions such as regulatory approvals, but is expected to close in the third quarter or early fourth quarter of 2011.
The companies maintain that there is a "strong strategic fit" between the two businesses which, combined with expanded capabilities in product development and marketing, will offer "significant long-term customer benefits."
"The acquisition of PAA Laboratories is a significant step forward for our Life Sciences business and for biopharmaceutical manufacturing globally," says Kieran Murphy, president and CEO of GE Healthcare Life Sciences, adding that his company is well-known for its expertise in the downstream processes of biopharmaceutical manufacturing. "Adding upstream capabilities will enable us to provide an end-to-end, fully integrated service to our customers. We believe that an integrated approach, where we can help customers optimize every stage of their manufacturing process, has the potential to reduce cost of entry, deliver higher yields of finished product and reduce time to market."
GE notes that the vaccine and biopharma markets are growing fast, which was certainly a consideration in this acquisition plan. Also, the global demand for media, sera and reagents for cell culture is predicted to grow from $2.3 billion in 2009 to an estimated $3.9 billion by 2015, according to BCC Research in its July 2010 report, "The Dynamic Media, Sera, and Reagent Market in Biotechnology."
The acquisition of PAA Laboratories is consistent with GE's strategy to invest in high-technology, innovative businesses that deliver strong top-line growth and expanded margins, Murphy asserts, adding that the acquisition also supports GE healthymagination, which is GE's global initiative to reduce cost, increase access and improve the quality of healthcare worldwide.
"This is a great opportunity for the professional team of staff at PAA Laboratories and we are very excited to become part of GE Healthcare's Life Sciences business," says Rainer Burian, CEO of PAA Laboratories, adding that the board of directors of PAA Laboratories "strongly believes that joining such a well-respected and recognized organization will give us significant opportunities to grow our business further with new technologies, products and services."
PAA Laboratories develops and manufactures specialized and innovative cell culture products such as media, sera, growth supplements and reagents for use in biomedical research and in the production of protein-based pharmaceuticals, and its products are said to be complementary to GE Healthcare's established technologies for cell biology research and biopharmaceutical purification.
PAA Laboratories was founded in 1988. It manufactures its products in GMP-certified facilities based in Austria, Australia and Canada, employs 215 people and had revenues of approximately $55 million in 2010.
"Over the coming months we will work on plans for a speedy and successful integration. Until the transaction closes…PAA Laboratories and GE Healthcare will continue to operate as two separate companies," Burian says. "Following completion of the transaction, PAA Laboratories will continue to operate as a distinct unit of GE Healthcare. There will be no material impact on the management and process concerning our operating business in the short term."