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Charles River Laboratories International, Inc. (CRL - Snapshot Report) recently completed its previously announced acquisition of 75% ownership in Vital River for $27 million. 

The acquisition deal was announced on October 30, 2012 and is expected to contribute more than 1% to the top line in 2013 while being slightly accretive to the bottom line.
Vital River is a commercial provider of research models and related services in China.  The company has been a licensee of Charles River for the last ten years. 
The acquisition will provide Charles River with access to high-quality research models and associated services for drug discovery and development in the emerging market of China. 
Charles River expects demand for research models in China to grow significantly in the coming years driven by consistent expansion of drug development initiatives in academia, government and biopharmaceutical companies. The company expects to capture a sizeable market share for research models in China which is being touted as the third-largest pharmaceutical market in the world. 
The acquisition will also make Charles River the exclusive global partner for the distribution of model creation services which are offered through Beijing Vital Star Biotechnology.  These services include humanized model creation utilizing inducible pluripotent stem cell and other technologies.
Charles River is on the lookout to strengthen its product portfolio through acquisitions and partnerships. In August 2012, Charles River acquired Accugenix, Inc. for $17 million to expand its endotoxin and microbial detection (EMD) portfolio of products and services. 
The company also signed a partnership deal with AstraZeneca (AZN - Analyst Report) in October 2012 to accelerate growth in the core safety assessment business. 
Charles River is currently in talks with several large biopharma companies and expects to convert a few of these discussions into deals in 2013. These deals will support growth in 2013.
However, we were disappointed by the company’s earnings guidance for 2013 (provided in December 2012) which was well below expectations even though revenue guidance was in-line with expectations. Consequently, almost all the analysts providing estimates for the stock have lowered their estimates for 2012 as well as 2013.  
We prefer to remain on the sidelines at this juncture and hence have a Neutral recommendation on Charles River which carries a Zacks #3 Rank (Hold).  Right now, MedAssets, Inc. (MDAS - Snapshot Report) looks attractive with a Zacks #1 Rank (Strong Buy). 

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