Financial terms were not disclosed. Theacquisition is subject to customary closing conditions such as regulatoryapprovals, but is expected to close in the third quarter or early fourth quarter of 2011.
The companies maintain that there is a "strongstrategic fit" between the two businesses which, combined with expandedcapabilities in product development and marketing, will offer "significantlong-term customer benefits."
"The acquisition of PAA Laboratories is asignificant step forward for our Life Sciences business and forbiopharmaceutical manufacturing globally," says Kieran Murphy, president andCEO of GE Healthcare Life Sciences, adding that his company is well-known forits expertise in the downstream processes of biopharmaceuticalmanufacturing. "Adding upstreamcapabilities will enable us to provide an end-to-end, fully integrated serviceto our customers. We believe that an integrated approach, where we can helpcustomers optimize every stage of their manufacturing process, has thepotential to reduce cost of entry, deliver higher yields of finished productand reduce time to market."
GE notes that the vaccine and biopharma marketsare growing fast, which was certainly a consideration in this acquisition plan.Also, the global demand for media, sera and reagents for cell culture ispredicted to grow from $2.3 billion in 2009 to an estimated $3.9 billion by2015, according to BCC Research in its July 2010 report, "The Dynamic Media,Sera, and Reagent Market in Biotechnology."
The acquisition of PAA Laboratories is consistentwith GE's strategy to invest in high-technology, innovative businesses thatdeliver strong top-line growth and expanded margins, Murphy asserts, addingthat the acquisition also supports GE healthymagination, which is GE's globalinitiative to reduce cost, increase access and improve the quality ofhealthcare worldwide.
"This is a great opportunity for the professionalteam of staff at PAA Laboratories and we are very excited to become part of GEHealthcare's Life Sciences business," says Rainer Burian, CEO of PAALaboratories, adding that the board of directors of PAA Laboratories "stronglybelieves that joining such a well-respected and recognized organization willgive us significant opportunities to grow our business further with newtechnologies, products and services."
PAA Laboratories develops and manufacturesspecialized and innovative cell culture products such as media, sera, growthsupplements and reagents for use in biomedical research and in the productionof protein-based pharmaceuticals, and its products are said to be complementaryto GE Healthcare's established technologies for cell biology research andbiopharmaceutical purification.
PAA Laboratories was founded in 1988. Itmanufactures its products in GMP-certified facilities based in Austria,Australia and Canada, employs 215 people and had revenues of approximately $55million in 2010.
"Over the coming months we will work on plans fora speedy and successful integration. Until the transaction closes…PAALaboratories and GE Healthcare will continue to operate as two separatecompanies," Burian says. "Following completion of the transaction, PAALaboratories will continue to operate as a distinct unit of GE Healthcare.There will be no material impact on the management and process concerning ouroperating business in the short term."