NEW YORK (GenomeWeb News) – Invitrogen Chairman and CEO Greg Lucier, who will hold the same role with Applied Biosystems if the firms consummate their $6.7 billion merger later this year, yesterday brushed aside concerns about integrating the two large firms.
Invitrogen had been relatively quiet on the mergers and acquisitions front for the past couple of years, following a flurry of activity in 2004-2005 that led to problems integrating the 15 businesses it acquired during that timeframe. The firm undertook a variety of measures including overhauling its IT infrastructure, consolidating facilities, and adjusting its sales strategy to clean up the negative effects of its acquisition binge.
In addition, following a portfolio review that began in the summer of 2006, Invitrogen offloaded its long-struggling BioReliance unit to private equity firm Avista Capital Partners for approximately $210 million.
When the deal to acquire ABI was announced yesterday, investors sent Invitrogen’s shares down 11 percent to close at $38.73 on the Nasdaq — in part, analysts speculated, on concerns about Invitrogen’s ability to quickly integrate the two businesses with minimal disruption.
The deal “seems to have created uncertainties over integration and management credibility, as the general assumption was that [Invitrogen] was not looking to pursue a larger transaction,” JP Morgan analyst Tycho Peterson wrote in a research note yesterday. He said investors’ “sensitivity is understandably heightened given the historical track record by Invitrogen on M&A.”
But during a conference call yesterday, Lucier aimed to assure investors that Invitrogen is much better equipped to deal with integrating an acquisition now than it was a few years ago.
“Those investors and analysts who know us well know that our company is a radically different one today than it was three years ago,” said Lucier. “We have a very solid and stable infrastructure from people to processes to systems.”
He added, “Our company could not be in a better position to take on something of this nature. Yes, it will be complex. Yes, it will be time consuming, and yes, there will be challenges."
Lucier said that one major difference now compared to a few years ago is that both Invitrogen and ABI have global IT systems in place. “Unlike our problems of a few years ago where we were trying to integrate a lot of little companies onto a lot of little information systems, we don’t have that complication here,” said Lucier. “So, I think it is going to make the integration in key areas very straightforward.”
The companies have yet to announce whether there will be job cuts and facilities consolidation, as is widely expected. Analysts have already speculated that Applera’s headquarters in Norwalk, Conn., will be shut down.
In Friday afternoon trade, shares of Invitrogen were down .7 percent at $38.46, while shares of ABI slipped 1.7 percent to $33.57 on the New York Stock Exchange.