Abcam to buy Epitomics for $170 million

6 March 2012  Print This ShareThis   In a second acquisition within six months, UK-based protein research tools supplier Abcam (AIM: ABC) has entered into a definitive agreement to buy Epitomics International, an antibody business headquartered in San Francisco, California, USA, with operations in China, for a gross consideration of $170.0 million.   News of the acquisition, which brings with it a major Chinese antibody operation, saw Abcam shares rise 2% to 339 pence in morning trading on Monday.  Enjoying this article? Have the leading Biopharma news & analysis delivered daily on email by signing up for our FREE email newsletter here.   

Net consideration of $155 million, half payable in cash   At completion Epitomics is expected to have net cash of $15.0 million resulting in net consideration for the acquisition of $155.0 million, of which 50% is payable in cash and the remainder in new Abcam shares (representing around 14.5 million new Abcam shares or about 7.3% of Abcam's enlarged issued share capital). The new Abcam shares will be subject to a lock-up on resale that expires six months after the tender offer closes and on other restrictions on resale imposed by US securities laws. Subject to customary closing conditions, the acquisition is expected to close in approximately one to two months' time.   Epitomics develops and distributes rabbit monoclonal antibodies for research and diagnostic applications. In 2011, the US company generated revenues of $24.7 million and pretax profit of $6.8 million.   Last fall, Abcam paid out ￡10 million (around $15.9 million) for fellow UK-based Ascent Scientific, a specialist provider of biochemical reagents with international sales (The Pharma Letter September 14, 2011).   The Epitomics acquisition is expected to be earnings neutral in the first full year of ownership as the company invests in the business to expand production and accelerate growth. It is expected to be earnings enhancing in the second full year of ownership.   

Strong financial results   Abcam yesterday also released its interim results for the last six months of 2011, showing that sales increased 13.5% to ￡44.7 million, while pretax profit, after adding back acquisition costs of Ascent Scientific and amortization of acquisition-related intangible assets, increased 15.9% to ￡17.6 million.