Back to top

Analyst Blog

Leading manufacturer of electronic instruments and disposables, Mesa Laboratories, Inc. , announced the acquisition of the flow calibrator business of Bios International Corporation. The acquisition includes all assets of Bios International as well as the design, production, sales and services associated with the gas flow calibration systems.

Mesa made initial cash payment of $16.66 million as part of the deal. Also, there will be a conditional future cash payment of $6.71 million depending on the performance of the business in the first three years from the closure of the deal. 

The acquisition is expected to boost Mesa’s financial performance in the upcoming years. Like Mesa, Bios also manufactures high margin products. The high profit margins of Bios calibrators and favorable tax treatment of this acquisition will allow Mesa to improve its cash flow considerably.

The acquisition is expected be accretive to Mesa’s GAAP earnings per share in the current fiscal year. The calibrators will also augment the instrumentation product line of Mesa. After the acquisition, the company will focus on sales of quality control products in government regulated industries.

According to a spokesperson at Mesa, the integration of Bios with Mesa’s Sale and Marketing organization will improve Bios’ current 10% organic growth rate. One of the major threats associated with the acquisition has been ruled out as Mesa will retain the current employees at Bios. Hence, Mesa has eliminated all possible obstacles related to integration.

Bios is a manufacturer of primary gas flow calibration systems of the topmost quality with a wide variety of applications in various industries. The inclusion of its calibration systems in Mesa’s product line will increase the consumers that the business serves.

Mesa currently serves the food and beverage processing industry, pharmaceutical and cosmetic industry, health care sterilization as well as dialysis market. After the acquisition, the company will expand its presence in a number of industries, including environmental, biotechnology, automotive and semiconductors.

Mesa has a proven track record of healthy growth boosted by new product development and acquisitions. It competes with Cantel Medical Corp. , Danaher Corp. (DHR - Analyst Report), and Thermo Fisher Scientific, Inc (TMO - Analyst Report) in certain categories of its market. With the acquisition of Bios and a strong product pipeline, Mesa is well positioned for long-term growth.

The stock currently retains a Zacks #2 Rank, which translates into a short-term Buy rating.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UTD THERAPE… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%