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Invitrogen Expects Greater Cost Savings Post-Merger; ABI Reaffirms Q1 Forecast

NEW YORK (GenomeWeb News) – Invitrogen said today that it expects synergies from its pending $6.7 billion merger with Applied Biosystems to be at least $80 million in the first year after close, instead of the $60 million initially forecasted by the firm. It said these synergies are mostly attributable to cost savings.
Carlsbad, Calif.-based Invitrogen said that the combination of greater cost savings and a lower than expected share count of 179 million shares will lead to the combined firm posting higher earnings-per-share growth than initially expected. However, that benefit will be partially offset by recent fluctuations in currency exchange and an increase in the expected interest rate on new debt.
Two weeks ago, Invitrogen secured $2.65 million in financing lines to help fund the acquisition of ABI.
Invitrogen now expects the combined firm to report fiscal 2009 EPS of at least $2.65, up from its previous forecast of at least $2.60.
Invitrogen also said that it expects to report third-quarter revenue growth in the mid-teens, including several points of growth due to currency benefits, when it reports results on Oct. 21.
Its merger partner, ABI, also said today that it expects its fiscal 2009 first-quarter results to be in line with the guidance it provided in late July. ABI expects its Q1 revenue to increase in line with the growth rate for the first quarter of 2008, with higher gross and operating margins compared to Q1 2008. ABI’s fiscal 2008 year ended on June 30, 2008.
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