Wednesday, Corning held a first quarter conference call to discuss earnings. During the call, Corning discussed recent acquisitions in the Life Science Industry as a key component of the company reaching their goal of $10 billion in revenue by 2014.
As part of their acquisition strategy, earlier this month, Corning announced that they would be acquiring a significant portion of Becton Dickinson’s (BD) Discovery Labware Unit for $730 million. This includes a plant in Durham, North Carolina that makes cultureware for research labs including pipettes, plates and flasks. BD forecasted revenue for this portion of their business at $235 million.
In December last year, Corning announced that they had completed the acquisition of media company, Mediatech. Mediatech manufactures and sells cell culture media and molecular biology reagents for tissue and cell culture applications. Their cellgro brand includes culture media, basal salt solutions, antibiotics, sera, specialty media and flexible packaging systems. In a Corning press release, Richard Eglen, General Manager, Corning Life Sciences, said “by providing customers worldwide with greater access to Mediatech’s cellgro product portfolio, this acquisition supports Corning’s ongoing commitment to supply its customers with a comprehensive line of laboratory research tools.”
This sentiment was reiterated during the first quarter earnings call when Corning’s Vice Chairman and Chief Financial Officer, James Flaws stated “Several years ago, we established the plan to grow our Life Sciences business to be a $1 billion business. We have grown organically, and with the acquisitions of Axygen, Gosselin and Mediatech reached nearly $600 million last year. The pending purchase of BD’s Discovery Labware unit will complement our existing portfolio and provide access to new customers. We believe this business will help catapult our Life Science segment towards its $1 billion goal by 2014.”
As the Life Science Industry continues to grow, in particular the cell culture market, companies that supply cell culture scientists are attractive acquisition targets. Please see our previous blog “The Market for Cell Culture Media Continues Expansion,” for market growth specifics. Corning has clearly embraced this philosophy as a way to offset losses in other areas of their business, including their display glass business, and to increase company revenue. Other companies have also been busy acquiring life science companies. Last year Merck KGaA (Darmstadt, Germany) acquired EMD Millipore who provides both upstream and downstream products for cell culture. Earlier this month, Sigma Aldrich acquired Research Organics to expand their buffer and raw materials for biopharmaceuticals business. In January Sigma acquired Bioreliance, which provides biologic, toxicology and animal health testing for biopharmaceutical companies. In March GE Healthcare acquired Xcellerex , a company that produces biomanufacturing systems and bioreactors incorporating single use components. Prior to Xcellerex, GE Healthcare acquired media company PAA.
These are just a few examples of several acquisitions that have happened within the year. Do you think these acquisitions and consolidation of products is a good thing? Why or why not?