“We’ve had this trend toward growing the business through internal, organic growth and also selective mergers and acquisitions for several years now, and since about 2009, we’ve made three other acquisitions to grow the life-sciences business,” Eglen tells ddn. “First, there was Axygen in 2009, then Plaslab in 2010 and most recently, before Discovery Labware, was the acquisition of Mediatech at the end of 2011. We are highly selective about the organizations we wanted to add to Corning, and BD’s business fit very well into our selective needs and strategy. Acquisitions are a large part of what’s going on in life sciences in general, but while we may be part of that trend, we are doing it in a more strategic and targeted way than compared to many companies.”

 

Axygen was attractive as a leading manufacturer and distributor of high-quality life sciences plastic consumable labware, liquid handling products and benchtop laboratory equipment with operations in the United States, France, Poland and China. Plaslab brought with it a wide array of sampling, testing and analysis products—including Petri dishes, bottles, containers, tubes, bags and accessories—to complement the general labware, cell culture, lab equipment and high-throughput screening and assay products offered by Corning. Mediatech was attractive for developing, manufacturing and selling a broad range of high-quality cell culture media and molecular biology reagents related to tissue and cell culture applications.

 

While he couldn't get into details about discussions that led up to the BD acquisition plans or how long negotiations have been going on, Eglen tells ddn that “We were already aware that Discovery Labware was a leading supplier of plastic consumable labware; we always thought they would be a good addition to our business. In the past, we’d had some informal discussions about a possible acquisition, though nothing serious. But they finally decided they really liked the idea and they reached out to us and that’s when the real discussions started.”

 

When this latest acquisition is complete, Corning will integrate four of the Discovery Labware unit’s main product platforms: plastic consumable labware (including tubes, pipettes, Petri dishes, tissue culture dishes and flasks); liquid-handling products; cell-based assays and cell cultureware; and ADME research into the Corning Life Sciences business segment. As for why Corning isn’t buying the whole of BD’s Discovery Labware business, Eglen says, “There were certain assets that were more aligned with BD and they elected to retain those as part of their own growth strategy. So, the deal excludes their advanced bioprocessing platforms, for example.”

 

James B. Flaws, vice chairman and chief financial officer for Corning, noted in the news release about the deal that the company will use a portion of its domestic cash balances to fund the transaction.

 

“We plan to continue our current share repurchase activity and maintain our ability to provide additional shareholder distributions in the future, should the board of directors choose to do so,” he said, adding that Corning predicts the transaction will be slightly accretive in 2013. “We expect this to grow to 5 cents per share, excluding purchased intangibles amortization, when full integration into our existing business is complete by 2016. Life sciences is an attractive growth industry and has low capital intensity. We expect this acquisition to provide a stable stream of incremental cash flow to Corning as we become a more balanced company.”

 

“Although short-term investors will likely focus on the net negative impact to free cash flow for 2012, we believe longer-term investors will consider the impact to free cash flow in 2013 and beyond,” maintains Andrew Huang, an analyst with Sterne Ageet, adding, “We do not think the acquisition will impact Corning's ability to move ahead with shareholder-friendly distributions.”

 

BD’s Discovery Labware unit, headquartered in Billerica, Mass., has operations in Massachusetts, North Carolina and the United Kingdom, and extensive dealer networks in Asia, Europe and North America. Eglen notes that it is still too early in the acquisition process to comment on what might be done, if anything, regarding the business’ location, staffing or other possible changes, but he did note in an official statement that “we are extremely excited and proud to add these talented people, proven research ability and established and well-respected products to Corning Life Sciences.”

 

“This acquisition fits really well into our short- and long-term strategies for Corning Life Sciences, as well as Corning Inc. as a whole,” Eglen tells ddn. “Corning’s strategy is to use its strong financial position to grow in a well-integrated fashion and this fits in with that. It improves our balance sheet and our overall strategic balance, and brings to us a portfolio of products that allow us to offer a wide range of lab products and services.”

 

“We are pleased that we found in Corning a buyer committed to growing sales for these components of our Discovery Labware unit, ensuring their ongoing success, and continuing to deliver value and service to customers,” said William A. Kozy, executive vice president of BD, in an official statement. “This sale will enable our BD Biosciences segment to focus resources and management attention on both our recent Biosciences acquisitions and our recently launched new instrumentation products, which are essential to our accelerated growth efforts.”

 

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Corning expands life-sciences product portfolio to include cell culture media, custom solutions

 

CORNING, N.Y.—Even as it looks to expand through the acquisition of most of BD’s Discovery Labware business, Corning is also expanding its life-sciences segment through continued organic growth, the most recent example being its newly increased portfolio of cell culture offerings, thanks to the addition of Corning cellgro, a line of high-quality cell culture media and molecular biology reagents for tissue and cell culture applications.

 

The Corning cellgro product line—announced in early April—combined with Corning’s disposable vessels and surfaces, reportedly provides researchers with a comprehensive portfolio of products for all stages of cell culture growth and scale-up, from sample preparation and separation through harvesting. Corning cellgro products are manufactured by Mediatech Inc., a subsidiary of Corning Inc., which happens to be the most recent acquisition by Corning Life Sciences prior to the signing of the deal with BD.

 

“Enhancing our cell culture and molecular biology portfolio with the cellgro brand supports our continued commitment to deliver customers worldwide with a full range of innovative laboratory products,” said Dr. Richard Eglen, vice president and general manager of Corning Life Sciences. “We now offer researchers and manufacturers off-the-shelf or fully customized beginning-to-end cell culture workflow solutions to facilitate upstream and downstream cell culture, help improve efficiency and produce more reliable, repeatable results.”

 

“This advancement bolsters our acquisition strategy and the synergistic approach we take to add incremental value to our customers,” Eglen added. “Since the acquisition of Mediatech Inc. in December 2011, we have also successfully integrated our sales and technical support teams to support the newly expanded full product line.”