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PerkinElmer (PKI) to Buy Oxford Immunotec for $591 million

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PerkinElmer, Inc. (PKI - Free Report) entered into an agreement to acquire Oxford Immunotec Global Plc for a total transaction value of $591 million. The deal is expected to close in the first half of 2021, subject to shareholder’s approval and customary closing conditions.

Through this acquisition, PerkinElmer will strengthen its portfolio of testing solutions and expand its global diagnostics market reach.

Detailed Financial Terms of the Deal

Per the terms of the deal, Oxford Immunotec’s shareholders are entitled to receive $22 in cash per share. The entire ordinary share capital issued by the company is valued at $591 million.

The terms of the acquisition represent a premium of 28.3% to Oxford Immunotec’s closing price of $17.15 (the last practicable date prior to the announcement) on Jan 5.

It also represents 99.2% premium to Oxford Immunotec’s enterprise value.

Notably, Oxford Immunotec will become a privately-held company and Oxford Immunotec’s ordinary shares will no longer be listed on any public market upon closing of a deal.

Oxford Immunotec at a Glance

Headquartered in Abingdon, the U.K., Oxford Immunotec is a global, high-growth diagnostics company, leader in proprietary test kits for latent tuberculosis. The company offers regulated ELISPOT assays for T cell measurement, with approval across the globe.

Oxford Immunotec reported total revenue of $73.7 million and $39.2 million as of the year ended Dec 31, 2019 and the nine months ended Sep 30, 2020, respectively.

Significance of the Buyout

The acquisition will enable PerkinElmer to expand its portfolio of advanced infectious disease testing solutions by including tuberculosis detection product line.

Moreover, the deal will enable PerkinElmer to merge its channel expertise and testing capabilities with Oxford Immunotec’s T Cell immunology with its proprietary test kits for latent tuberculosis.

Oxford Immunotec’s diagnostic testing solution plays a vital role in slowing the spread of the disease and saving more lives around the world. With the addition of Oxford Immunotec, PerkinElmer expects its position in infectious disease diagnostic testing market to receive a boost.

The acquisition is expected to be modestly accretive to PerkinElmer’s non-GAAP earnings in year one following the closure. The company anticipates Oxford Immunotec’s sales growth will exceed that of its Diagnostics franchise for the foreseeable future.

Industry Prospects

Per a report by Grand View Research, the global tuberculosis diagnostics market was valued at $2.1 billion in 2015 and is expected to see a CAGR of 4.1% by 2024. Per a WHO report, tuberculosis incidence estimates were around 9.6 million globally. In the same year, around 1.5 million deaths were reported due to this communicable disease. This rising incidence of infectious disease is the prime factor for market growth.

Notable Developments

In December 2020, PerkinElmer launched the CE mark EURORealTime SARS-CoV-2/Influenza A/B for direct detection of SARS-CoV-2, influenza virus type A and type B. It expands the testing portfolio for acute COVID-19 diagnostics by supporting differential diagnostics between SARS-CoV-2 infections and the common flu.

In the same month, PerkinElmer launched the CE marked SARS-CoV-2 Antigen ELISA for specific determination of the SARS-CoV-2 protein. The launch strengthens the company’s broad product portfolio for COVID-19 diagnostics and supports the molecular PCR tests to support in diagnosing acute SARS-CoV-2 infections.

Price Performance

Shares of the company have surged 55.8% in a year’s time compared with the industry’s growth of 33.6%.

Zacks Rank and Other Key Picks

Currently, PerkinElmer sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks from broader medical space include Cantel Medical Corp. , Hologic, Inc. (HOLX - Free Report) , Mesa Laboratories, Inc. (MLAB - Free Report) , each sporting Zacks Rank # 1. You can see the complete list of Zacks #1 Rank stocks here.

Cantel has a projected long-term earnings growth rate of 19%.

Hologic has a projected long-term earnings growth rate of 17.40%.

Mesa Laboratories has an estimated long-term earnings growth rate of 5.26%.

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