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Agilent to Acquire BioTek, Cell Analysis Portfolio to Expand

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Agilent Technologies, Inc. (A - Free Report) has entered into a definitive agreement to acquire Winooski, VT-based BioTek Instruments, Inc., a provider of life science instrumentation, in a bid to expand presence in life science research space further.

While the acquisition is worth $1.165 billion, considering tax benefits it comes in at $1.05 billion. Further, the deal is anticipated to conclude in Agilent’s fourth-quarter fiscal 2019.

BioTek’s product portfolio, which comprises microplate readers, washers, dispensers, cell imaging systems, automated incubators and stackers, will strengthen Agilent’s offerings related to live cell analysis as these product lines aid in quantification of biomolecules, biomolecular interactions and cellular structure.

Moreover, the products help in conducting cost-effective analysis across diverse applications. Further, they enable the company to deliver a range of differentiated workflows.

All these are expected to bolster Agilent’s presence in the booming immuno-oncology and immunotherapy markets.

Buyout to Aid Growth

BioTek’s products are likely to drive customer momentum of Agilent and aid it in winning customers who are involved in biopharma, academia and research activities in complex cellular environments and interactions.

Consequently, this is likely to bolster the performance of the company’s Life Sciences & Applied Markets Group (LSAG) and accelerate revenues generation within the segment which is largest contributor to total revenues. We note that LSAG accounted for 46% of fiscal 2018 revenues.

Additionally, management believes this buyout to be accretive, which is likely to contribute $0.02-$0.04 to non-GAAP earnings per share for fiscal 2020.

Consequently, the buyout is likely to help Agilent in gaining traction among the investors.

Coming to the price performance, shares of Agilent have returned 13.2% over a year, outperforming the industry’s rally of 8.8%.



Journey with BioTek

Relationship with BioTek has been beneficial for Agilent in the life science field.

In the beginning of 2018, both the companies teamed up to develop a new integrated solution that Agilent’s Seahorse XFe96 and XFe24 Analyzers with BioTek’s Cytation 1 Cell Imaging Multi-Mode Reader.

It enables improved comparison of XF data and embedment of images into WAVE software. Further, it helps researchers to understand cellular metabolism better by conducting a detailed cell analysis with XF data, and brightfield and fluorescence images.

The solution complements Agilent’s cell analysis capabilities and the recent acquisition will expand cell analysis portfolio upon completion. Moreover, the buyout decision only forges an even better relationship with BioTek.

Strategic Acquisitions: Key Catalyst in Cell Analysis

Acquisitions have been playing an important role in shaping the growth path of Agilent in the cell analysis market.

Apart from BioTek, Agilent bought Seahorse Bioscience, which acted as its stepping stone in this particular market. Further, it acquired Luxcel Biosciences and ACEA Biosciences.

Moreover, the Luxcel buyout has aided the company in expanding its Cork facility in Ireland, with the aim of developing advanced technologies for real-time live-cell analysis.

We believe all these strong endeavors position Agilent well to reap benefits from the global cell analysis market, which is growing rapidly on the back of increasing prevalence of chronic and infectious diseases, and rising research and development activities in life science.

Zacks Rank & Stocks to Consider

Currently, Agilent carries a Zacks Ranks #3 (Hold).

Some better-ranked stocks in the broader technology sector are Alteryx, Inc , ServiceNow, Inc. (NOW - Free Report) and Applied Materials, Inc (AMAT - Free Report) . While Alteryx sport a Zacks Rank #1 (Strong Buy), ServiceNow and Applied Materials carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Alteryx, ServiceNow and Applied Materials is currently pegged at 13.66%, 28% and 6.67%, respectively.

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