PerkinElmer Acquires China-based Infectious Disease Diagnostics Company
Addition of Shanghai Haoyuan Biotech to Complement Screening Capabilities & Allow PerkinElmer to Enter Growing Chinese Nucleic Acid-based Blood Screening Market
WALTHAM, Mass. & SHANGHAI--(BUSINESS WIRE)-- PerkinElmer, Inc. (NYS: PKI) , a global leader focused on the health and safety of people and the environment, announced today that it has completed the acquisition of Shanghai Haoyuan Biotech Co., Ltd., a China-based infectious disease diagnostics company. The acquisition extends PerkinElmer's capabilities into nucleic acid blood screening and in the growing molecular clinical diagnostics market in China, further strengthening the Company's position as a diagnostics leader in China as well as across the globe.
Haoyuan, a supplier of molecular infectious disease screening technologies for blood bank and clinical laboratory settings throughout China, extends PerkinElmer's portfolio by adding four infectious disease assays that are approved by China's State Food and Drug Administration (SFDA). These infectious disease diagnostics tools include a qualitative 3-in-1 assay for the detection of hepatitis B (HBV), hepatitis C (HCV), and human immunodeficiency virus (HIV), two clinical quantitative assays that screen for HBV and HCV, and one qualitative assay screen for chlamydia trachomatis and neisseria gonorrhoeae (CTNG).
"By combining PerkinElmer's robust disease screening capabilities with Haoyuan's proprietary reagents and equipment, the Company will be able to offer highly sensitive systems and assays for quality detection of blood-borne infections for the Chinese market," said Robert Friel, chairman and chief executive officer of PerkinElmer. "Integrating Haoyuan's screening products with PerkinElmer's diagnostics capabilities will help to further advance the health of the Chinese people by offering leading technology that ensures accurate diagnosis of infectious diseases at a low cost."
Facing an annual 15% increase in the demand for blood, the Chinese government is now mandating and funding infectious disease screening of donated blood. The Chinese government's latest 5-year plan mandates that all blood be tested using nucleic acid technologies by the end of 2015. Compared to antibody testing methods, nucleic acid testing reduces the potential for failed detection of certain infection diseases that exhibit long incubation times between infection and detection. There are approximately 780,000 people living with HIV/AIDS in China. The World Health Organization also reports chronic infection rates of 8% to 10% of the adult population with HBV and 3.2 % of China's 1.4 billion population living with HCV.
The Haoyuan acquisition enables PerkinElmer to supply advanced, highly sensitive diagnostics screenings to these banks, ensuring that HBV, HCV and HIV are accurately detected prior to transfusion. Simultaneously, this product integration strengthens the safety of the blood banks in China while creating an opportunity for future implementation in other countries. In a clinical setting, the combined capabilities can also reduce time for identifying an infectious disease, which enables quicker treatment and better outcomes for patients. The purchase price for the transaction was $38 million in cash and potential future additional consideration based on the achievement of revenue-based targets. The acquisition is anticipated to be immaterial to PerkinElmer's adjusted earnings for the remainder of 2012 and 2013 and accretive beginning in 2014.
PerkinElmer, Inc. is a global leader focused on improving the health and safety of people and the environment. The company reported revenue of approximately $1.9 billion in 2011, has about 7,000 employees serving customers in more than 150 countries, and is a component of the S&P 500 Index. Additional information is available through 1-877-PKI-NYSE, or at www.perkinelmer.com.
Use of Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures including "adjusted earnings." Adjusted earnings refers to GAAP earnings, excluding amortization of intangible assets, inventory fair value adjustments related to business acquisitions, and other costs related to business acquisitions. We believe that this non-GAAP measure, when taken together with our GAAP financial measure, allow us and our investors to better measure the performance of our investments and to evaluate the long-term profitability trends of our core operations. We exclude amortization of intangible assets, inventory fair value adjustments related to business acquisitions, and other costs related to business acquisitions from these measures because intangibles amortization charges do not represent what we believe our investors consider to be costs that support our internal operating structure and could distort the efficiencies of that structure. Adjusted earnings also provides for easier comparisons of our performance and profitability with prior and future periods and relative comparisons to our peers. We believe our investors do not consider the items that we exclude from adjusted earnings to be costs of producing our products, investments in technology and production or costs to support our internal operating structure, and so we present this non-GAAP measure to avoid overstating or understating to our investors the performance of our operations.
Factors Affecting Future Performance
This press release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements relating to estimates and projections of future earnings per share, cash flow and revenue growth and other financial results, developments relating to our customers and end-markets, and plans concerning business development opportunities and divestitures. Words such as "believes," "intends," "anticipates," "plans," "expects," "projects," "forecasts," "will" and similar expressions, and references to guidance, are intended to identify forward-looking statements. Such statements are based on management's current assumptions and expectations and no assurances can be given that our assumptions or expectations will prove to be correct. A number of important risk factors could cause actual results to differ materially from the results described, implied or projected in any forward-looking statements. These factors include, without limitation: (1) markets into which we sell our products declining or not growing as anticipated; (2) fluctuations in the global economic and political environments; (3) our failure to introduce new products in a timely manner; (4) our ability to execute acquisitions and license technologies, or to successfully integrate acquired businesses and licensed technologies into our existing business or to make them profitable, or successfully divest businesses; (5) our failure to adequately protect our intellectual property; (6) the loss of any of our licenses or licensed rights; (7) our ability to compete effectively; (8) fluctuation in our quarterly operating results and our ability to adjust our operations to address unexpected changes; (9) significant disruption in third-party package delivery and import/export services or significant increases in prices for those services; (10) disruptions in the supply of raw materials and supplies; (11) the manufacture and sale of products exposing us to product liability claims; (12) our failure to maintain compliance with applicable government regulations; (13) regulatory changes; (14) our failure to comply with healthcare industry regulations; (15) economic, political and other risks associated with foreign operations; (16) our ability to retain key personnel; (17) significant disruption in our information technology systems; (18) our ability to obtain future financing; (19) restrictions in our credit agreements; (20) our ability to realize the full value of our intangible assets; (21) significant fluctuations in our stock price; (22) reduction or elimination of dividends on our common stock; and (23) other factors which we describe under the caption "Risk Factors" in our most recent quarterly report on Form 10-Q and in our other filings with the Securities and Exchange Commission. We disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.
Edelman (On behalf of PerkinElmer, Inc.)
Paul Barren, 404-460-9679
Stephanie Wasco, 781-663-5701
Vice President, Corporate Communications
Tommy Thomas, 781-663-5889
Vice President, Investor Relations
KEYWORDS: United States Asia Pacific North America China Massachusetts
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