Luminex acquires EraGen for $34 million

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.

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AUSTIN, Texas—Luminex Corporation, through the signing of adefinitive agreement, will acquire privately-held EraGen Biosciences, Inc., aleader in the development of molecular diagnostic testing technologies for bothinfectious disease and genetic applications. Per the terms of the agreement,Luminex will purchase all of EraGen's outstanding shares for approximately $34million in cash, subject to certain adjustments.
Luminex expects the acquisition to add between $5 millionand $7 million to the company's 2011 consolidated revenue. EraGen generatedabout $8 million in product revenue last year. Luminex expects the transactionto 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 chargesfor non-recurring cash and non-cash acquisition-related costs in terms of theacquisition. Completion of the deal is subject to customary closing conditions,as well as the approval of EraGen shareholders, and the acquisition is expectedto close within the next few weeks.
"We are excited by the opportunity to expand ourcapabilities and product line in the important and rapidly growing infectiousdisease 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 thestrategic investments we have made and provides additional resources for sales,support, and assay development, strengthening our leadership position andexpanding our footprint within the molecular diagnostic market."
The acquisition complements Luminex's current areas offocus. EraGen's development, manufacturing and marketing of molecular reagentproducts and molecular diagnostic testing technologies meshes with Luminex'sproduction of biological testing technologies. By acquiring EraGen, Luminexgains access to the company's portfolio of molecular diagnostic assays, whichare based on EraGen's proprietary technology platform, MultiCode. The assaychemistry is a platform for real-time polymerase chain reaction (PCR) andmultiplex PCR-based applications. The acquisition also allows Luminex to offerits products to EraGen's existing customer base.
"By acquiring EraGen, Luminex has significantly enhanced itscompetitive strength," said Irene Hrusovsky, M.D., president and CEO ofEraGen Biosciences, in a press release regarding the acquisition. "As one ofAmerica's fastest growing companies, Luminex will benefit from EraGen'sinnovative technologies and expertise to penetrate new segments. I am confidentthat the company will realize significant business and technology synergies asLuminex brings the global reach and scale required to effectively leverage theenormous potential of EraGen's franchise in molecular diagnostics."
Some of EraGen's current products include the MultiCode-RTxHerpes Simplex Virus (HSV) 1&2 Kit for in-vitro diagnostic use, which is the first U.S. Food andDrug Administration-cleared PCR-based qualitative test for detecting and typingHSV-1 or HSV-2 from vaginal lesion swab specimens. EraGen also has severalanalyte specific reagents for detecting infectious agents, as well as researchuse only reagents for infectious diseases related to organ transplantation. Thecompany has another MultiCode project in the works as well, the MultiCode-PlxRespiratory Virus Panel.
EraGen has about 70 employees at its Madison, Wis.-basedfacilities. Currently, Luminex expects to maintain EraGen's operations inMadison.

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