This update adds company comments and details from a conference call.
NEW YORK, Oct. 29 - Seeking to trim spending and present life-science customers with a "single face," PerkinElmer today said it will combine its Life Sciences and Analytical Instruments business units into a new division.
Peter Coggins, current president of the Life Sciences unit, will become president of the new organization, which takes shape "immediately." Stephen DeFalco, the current president of Analytical Instruments, will help with the transition through the end of the year.
It was not immediately clear whether DeFalco will stay on in the new unit, which will be called Life and Analytical Sciences, nor was it known whether the new business will retain all of the staff that currently works for the units.
The new division "will enable PerkinElmer to provide a single, unified face" to its customers and "bring greater resources to our analytical customers," Gregory Summe, chairman and CEO of PerkinElmer, said in a conference call this morning. "It also enables us to better leverage our R&D investment, global sales and service network."
According to Summe, the combined unit will have approximately $1 billion in revenue, more than 2,000 sales, service, and applications employees, and an annual R&D budget of around $65 million. During the call, he said that roughly 40 percent of Analytical Instruments' customers in biopharma and academic labs are also Life Sciences customers.
Summe said the new division, which will be based in Boston, is expected to save PerkinElmer around 15 percent of an estimated $300 million in combined SG&A spending. He also said that some of the cost saving will come from reductions in head count.
A PerkinElmer spokesman later said "it is difficult to predict" which staff would be laid off. He explained that Coggins and a handful of hand-picked executives would devise a detailed transition plan "during the next few weeks" and recruit staff from within the company to populate the new unit. The spokesman, Jim Monahan, also stressed that PerkinElmer will "continue to maintain a significant presence" in Shelton, Conn., the Analytical Instruments unit's former base.
From a revenue perspective, the Life Sciences division reported a 57-percent spike in third-quarter revenue, to $117.7 million. However, the bulk of that came from PerkinElmer's acquisition of Packard BioScience last year. Not counting the acquisition, revenue actually declined 7 percent, the company said. "Double-digit growth in genetic screening, and growth in reagents and service sales was offset by weakness in sales of instrumentation to large pharmaceutical customers," PerkinElmer said.
Meantime, "weak instrument sales" in the third quarter pushed revenues for the Analytical Instruments to $115.1 million, down from $130.2 million reported year over year, PerkinElmer said.