Biotage Divests Biosystems Division to QIAGEN
As a result of the Strategic Review of Biotage’s entire operations, launched in October 2007, the Board of Biotage AB (“Biotage”) has concluded to divest the Biosystems division (“Biosystems”) and the shares in Corbett Life Science Pty Ltd (“Corbett”) to QIAGEN. The transaction is expected to close on October 2, 2008. Biotage will focus its future activities on the Discovery Chemistry division with attention to improving the operating margin, creating organic growth and acquire complementary products or businesses.
QIAGEN will acquire the assets of Biosystems and Biotage’s shares held in Corbett (17.5%), for an initial purchase price of US$ 53m. In addition, provided that certain performance and milestone criteria are met, up to maximum US$ 7m can further be paid to Biotage by QIAGEN over a period ending 31 December 2012. QIAGEN will offer employment to the entire staff related to Biosystems.
After adjustment for inter alia certain liabilities that QIAGEN will take over at closing, Biotage will receive a net cash of approximately US$ 50m. The capital gain for the transaction for Biotage is expected to be approximately SEK 220m before taxes.
Biosystems (as a primary segment) generated revenues of SEK 101.2m (out of Biotage’s total of SEK 481.7m) and an operating profit of SEK 28.1m (out of Biotage’s total of SEK 42.4m) in the 12 months ended 30th June 2008. In addition, Biotage received dividends from Corbett of SEK 7.6m during the same period.
Biotage will act as a distributor for QIAGEN during the fourth quarter of 2008. The net result for Biotage from this distribution agreement is expected to be marginal. Biotage will also in accordance with a separate “transfer service agreement” provide certain administrative services to QIAGEN for the next twelve months.
The Board is very pleased to have concluded the deal with QIAGEN. The proceeds from this transaction will allow Biotage to further enhance and develop the Discovery Chemistry division. Biotage envisage broadening its current product offering into new applications. Such areas of interest include environmental and food analysis. Biotage also believe strongly in the possibilities of further developing and broadening its microwave technologies for new applications. The Strategic Review process has further given indications of possibilities to venture into new areas, which have stronger synergies with the Discovery Chemistry division than the now divested Biosystems division. The overall target will be to enhance the top line growth, organically as well as through acquisitions while maintaining a healthy operating profit.
Biosystems has gained strong technology and productivity momentum in recent years. A new instrument platform was launched late in Q1 of 2008 which allowed expanding the business into the diagnostic field, a field where Biotage historically has not been active. Given the strategic focus on its Discovery Chemistry business, Biotage decided to partner with QIAGEN, who has the expertise, capabilities and resources to fully exploit the potential of the Pyrosequencing technology by leveraging it into the market for in vitro diagnostics.
”The fit with QIAGEN is extra ordinary and will be very beneficial for customers of both companies.'' Torben Jørgensen, CEO of Biotage said. ”QIAGEN has an excellent molecular assay and also epigenetic portfolios which perfectly fits together with our PyroMark instruments. Many of our customers are QIAGEN customers as well. In addition, QIAGEN's technology leadership in molecular sample and assay technologies, its global reach and extensive marketing, combined with strong relationships with researchers and leading laboratories around the world, bring exciting opportunities for Biosystems. QIAGEN is the ideal partner to take the Biosystems business to the next level and to fully exploit the Pyrosequencing technology.''
”Pyrosequencing technologies are excellent complements to our portfolio of current and future molecular testing solutions, including our modular processing platform QIAsymphony”, said Peer Schatz, CEO of QIAGEN. “We are proud to offer our customers in molecular diagnostics, applied testing, pharma and academic research ’sample to result’ solutions which address further, significant information needs. Our ‘sample to result’ solutions now span qualitative/endpoint PCR, multiplex technologies, capillary electrophoresis as well as quantitative and high resolution sequence-based analysis. With Pyrosequencing, we are adding nothing less but a proven Gold Standard for high-resolution sequence detection and quantification which, due to its high level of reliability, accuracy, ease-of-use and cost-efficiency is widely used in today’s next generation sequencing technologies. As such, QIAGEN is not only gaining financial interest and technological leadership in a core next generation sequencing technology, but is also addressing significant current and future needs in our core markets for quantitative, high-resolution sequence analyses of short-medium stretches.”
Greenhill & Co is advising Biotage in relation to the Strategic Review.
Torben Jörgensen, President and CEO
Tel: +46 707 49 05 84, firstname.lastname@example.org