Meridian Bioscience Acquires Magellan Diagnostics, Inc.
CINCINNATI, March 24, 2016 (GLOBE NEWSWIRE) — Meridian Bioscience, Inc., Cincinnati, Ohio (NASDAQ: VIVO) announced today that it has completed the acquisition of Magellan Biosciences, Inc. and its wholly owned subsidiary Magellan Diagnostics, Inc. Headquartered in Billerica, Massachusetts (near Boston), Magellan pioneered the engineering, development and manufacturing of FDA-cleared products for the testing of blood to diagnose lead poisoning in children and adults.
Today, Magellan is the leading provider of point-of-care lead testing systems with placements in more than 6,500 physician offices and clinics nationwide. Its position in pediatric offices is particularly strong. LeadCare® II, the only CLIA-waived lead testing system, enables physician practices to enhance the quality of care, improve patient compliance and convenience, and reduce costs. Magellan's LeadCare Ultra® and Plus® systems are designed for use in hospitals and reference labs.
Magellan has a robust product development pipeline and plans to introduce a third generation platform that will include a menu of additional high value CLIA-waived pediatric tests including, but not limited to, lead testing. Magellan's talented team of executives and employees led by Amy Winslow, President and Chief Executive Officer of Magellan, will continue to manage the business, which will remain in its current location and facility.
From a strategic perspective, the acquisition of Magellan provides (i) an important point-of-care capability, (ii) ready-made access and expansion of certain of Meridian's products into the pediatric market, (iii) expansion of Magellan's products into international markets where Meridian has a presence, (iv) opportunities within Meridian's hospital market as hospitals acquire physician office practices, and (v) a new growth driver as the importance of lead testing and remediation in the United States and global community becomes better understood.
Magellan was acquired from an investor group including Ampersand Capital Partners as the majority owner, along with Abingworth, Tekla Capital and Boston Community Venture Partners. Magellan sales for 2015 were $16 million and the business is growing and profitable. Meridian expects Magellan to be accretive to earnings per share during the second half of calendar 2017. Meridian will finance the purchase price of $66 million using a combination of cash on hand and a $60 million five-year term loan. Meridian remains conservatively capitalized and in a position to maintain its indicated annual cash dividend rate, fund expected growth requirements, and pursue additional acquisitions.
John A. Kraeutler, Chairman and Chief Executive Officer of Meridian, commented, “A key underpinning of our diagnostic growth strategies has been to address “test and treat” opportunities by applying highly accurate and simple-to-use tests for rapid diagnoses, thereby enabling appropriate treatment. Because elevated lead levels can cause serious developmental impairment, especially in young children, the need for broad testing and fast remediation of the contaminated environment is acute. Magellan has maintained a clear focus on developing and marketing test systems that are well recognized for their accuracy and ease-of-use. Further, the Magellan test systems are now in use by more than 10,000 pediatricians, primarily in the U.S. We believe that there is excellent growth potential in Magellan Diagnostics on its own, both with the existing products and the pending new product pipeline. Further, we believe that Meridian and Magellan can leverage their complementary but separate customer channels both in the U.S. and global markets. From the beginning of this process, we have been impressed by the quality of the Magellan team. We believe that the respective company cultures will align very well and, it is our intention to allow Magellan to remain largely autonomous while working closely on strategic opportunities that maximize the strengths of each. We welcome each member of Magellan into the Meridian Bioscience family of companies!”
Amy M. Winslow, President and Chief Executive Officer of Magellan, commented, “By joining forces with Meridian Bioscience, Magellan Diagnostics will better achieve our mission of identifying and protecting the millions of people – primarily children – at risk from the devastating, lifelong effects of lead. Our proprietary sensor-based platform has been refined over the course of a decade and offers unparalleled simplicity as well as the design flexibility to enable menu expansion. Meridian understands the potential of our platform and of our pediatric footprint; the synergies between Meridian and Magellan were clear from the outset, especially our mutual dedication to delivering unique tests that simplify the diagnostic process. Together, we will have a larger presence in both hospital laboratories and in physician offices, both in the U.S. and abroad, to bring our respective products to more patients who need them.”