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Invitrogen, Distended by Big Acquisitions, Will Now Concentrate on Fewer, Smaller Buys

NEW YORK (GenomeWeb News) –Invitrogen, distended from a binge of acquisitions in 2004 and 2005, will focus on fewer and smaller buys in the future, a company official said this week.
Speaking at the Lehman Brothers Global Healthcare Conference in Miami, CFO David Hoffmeister said the firm will most likely make tuck-in acquisitions this year, though it does not see gaps in its portfolio.
“Invitrogen is a natural way to market for entrepreneurs and others who develop innovative technologies, and so we’re going to continue to do acquisitions,” Hoffmeister said at the conference. “Those acquisitions, though, are going to be fewer than we’ve done in the 2004-2005 timeframe, and smaller, more tuck-in types of deals.
In 2005 Invitrogen spent at least $650 million acquiring eight companies. In 2006, the firm made just one acquisition: the $25.9 million deal to acquire Sentigen, which was completed last December.
Hoffmeister said this week that this type of smaller deal is much more likely for Invitrogen this year as well.
“We’ll continue to do acquisitions, despite our research and development spending and our active in-licensing program,” he said. “We’re never going to be able to in-license or develop ourselves all of the technologies that are going to come out of this rapidly changing industry.
“We feel very good about the portfolio as we currently [have] it. We don’t see any major holes,” he added. “So, we’re not looking at large acquisitions to fill any gaps.”
The remarks come after the company departed from comments officials made in early 2006 that the firm would spend roughly half a billion dollars on acquisitions that year. But those plans were derailed by a number of challenges, including continuing difficulties in its BioReliance business, a massive IT overhaul, and integration issues related to the purchases in 2005.
“We have been very aggressive on integrating our acquisitions,” said Invitrogen Chairman and CEO Greg Lucier during the firm’s third-quarter conference call in late October. “And perhaps for a company of our size, maybe too aggressive.”
He said that as a result, Invitrogen had to slow the pace of its acquisitions in 2006. “We have gone back through the portfolio and reviewed it,” said Lucier. “I think we have done everything prudent to put the company on a better foundation.”

The complete version of this article appears in the current issue of BioCommerce Week, a GenomeWeb News sister publication.

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