In order to grow in the area of proteomics, Invitrogen Corp. signed a definitive agreement to acquire BioSource International Inc. for about $130 million in cash.
Camarillo, Calif.-based BioSource has been actively looking for a purchaser since April, when its board rejected an offer by Bio-Rad Laboratories Inc. Bio-Rad, of Hercules, Calif., offered $8.50 a share, or about $82 million in cash, but the largest stockholder of BioSource, Genstar Capital Partners II LP, said the proposed price was significantly below the company's inherent value.
In contrast, Genstar and another investor, Stargen II LLC - which together hold 22 percent of BioSource's stock - have agreed to vote for the Invitrogen merger, and the BioSource board has unanimously recommended approval of the transaction. Carlsbad, Calif.-based Invitrogen has offered BioSource stockholders $12.50 per share for all shares issued and outstanding.
After three months of exploring various strategic alternatives, BioSource agreed to the merger late Monday evening. Its stock (NASDAQ:BIOI) rose 92 cents Tuesday to close at $12.32, while Invitrogen's stock (NASDAQ:IVGN) rose $1.47 to close at $86.50.
The transaction, subject to regulatory and BioSource stockholder approvals, should close by the end of the year.
The deal augments Invitrogen's collection of protein and primary antibody products gained through its recent acquisitions of South San Francisco-based Zymed Laboratories and Caltag Laboratories, of Burlingame, Calif.
"What we've been doing for a bit now and particularly heavily this year is working to expand and round out our proteomics offering," said Greg Geissman, Invitrogen's public relations manager. "And BioSource's product portfolio actually fits in some areas where we didn't have offerings, particularly in cytokine reagents and assays."
Invitrogen paid $60 million in January for Zymed, gaining a collection of more than 2,000 antibodies and related products, as well as an application used for patient stratification in clinical trials, called Chromogenic In-Situ Hybridization, or CISH. (See BioWorld Today, Jan. 11, 2005.)
In May, it bought Caltag for $20 million, adding more antibodies and reagents to its business.
The acquisition of BioSource will bolster Invitrogen's kinase and cytokine assay technologies for research applications, and allow it to enter new markets in immunology, oncology and neurodegenerative disease.
"We think it's going to fuel our top-line growth," said Gregory Lucier, Invitrogen's chairman and CEO, adding that it "is going to be significantly accretive" to the company's long-term earnings.
BioSource will bring to Invitrogen a collection of proteins, primary and secondary antibodies, and reagents for single and multiplex cytokine and signal transduction assays. The company has introduced more than 200 new products per year since 2001. It employs more than 240 people around the world, all of whom will continue to be employed by Invitrogen at its BioSource subsidiary.
"Typically, as with most of our acquisitions upon closing, we will put together a detailed integration plan," Geissman told BioWorld Today.
Terrance Bieker, BioSource's president and CEO, said in a Tuesday conference call that Invitrogen's "similarity of culture and commitment to focused objectives" makes the merger with BioSource a sound plan.
"We anticipate that this merger is going to result in ever-increasing opportunities for our employees and for our life science customers," he said.
Invitrogen said the transaction should have no impact on 2005 pro-forma earnings per share, and will be accretive by 4 cents in 2006.
Reporting its second-quarter results on Tuesday, BioSource said it had net sales of $13 million, a 15 percent increase over last year's second quarter. It had a net income of $751,000, or 8 cents per share. As of June 30, it had $7.1 million in cash and cash equivalents.