It will take nearly a year for PerkinElmer and its new unit Packard Bioscience to weave together their businesses, according to company officials, although PerkinElmer’s acquisition of Packard Bioscience was finalized Tuesday.
The microarray businesses of both companies are likely to be combined under the merger, in which PerkinElmer acquired Packard in a stock deal valued at $650 million. The company is initially planning to retain most US sales staff from the Packard side, giving generous retention incentives to some. European sales offices, however, will have to be consolidated. The name Packard is likely to be retained as a brand name for certain products, although the company will be absorbed into PerkinElmer, company sources said.
The official integration plan, which PerkinElmer executives explained at a webcast for Packard employees Monday, includes three 100-day integration periods, the first of which began Tuesday. PerkinElmer Life Sciences vice president John Engel will steer the company through this transition period.
“We have put together a 100-day integration plan, and will bring together a joint integration team,” said Kevin Lorenc, a spokesman for PerkinElmer. “All decisions with regard to products, employees, and facilities will be decided during this integration process.”
As part of this plan, Frank Witney, president of Packard, will become the new president of drug discovery at PerkinElmer, and will report directly to Engel.
Meanwhile, the transition team will be divided into 30 to 35 smaller teams made up of employees from both companies, each of which will focus on a specific product or service area, said Wayne Richardson, director of investor relations at Packard, which is based in Meriden, Conn. “The object is, out of the two companies, only the best of everything survives,” he said.
Decisions about what to keep and what to jettison will be made by the team assigned to integrate high-volume DNA sample preparation robots, as both companies produce these instruments. There is also overlap in other liquid handling instrumends and microplate readers. But in the microarray area, the issue is more how to integrate PerkinElmer’s pre-printed chips and reagents with Packard’s instruments, said Dile Holton, a product manager for Packard.
Both Packard and PerkinElmer sales staff had earlier expressed concerns that the merger would lead some instrument sales reps, in areas where the companies overlap, to be laid off. But PerkinElmer has apparently offered at least some US Packard sales staff generous financial incentives to stay, and Packard sales engineers were busy on Tuesday selling the new offerings of the combined company.
“We are the only company that has a comprehensive approach to microarrays,” said Michael Megginson, a Packard sales rep, at the Cambridge Healthtech Institute’s Microarray Analysis Conference in Alexandria, Va. this week. “Perkin- Elmer has the chips, or you can make the chips with our instruments, and you can scan chips with our scanners, and immediately dump the information into our database.”
Richardson said there would be little trimming of US sales staff in the wake of the merger: “PerkinElmer’s American [branch] NEN is a reagent company, and they don’t have instrument sales. The instrument sales division they have is Wallac, based in Finland. Packard has a strong sales force throughout the States.” Furthermore, he said, both companies have been expanding their sales forces as the market expands.
However, Packard has direct overseas sales offices in 23 countries, and PerkinElmer has 22 foreign offices. There is significant overlap, for example, with both companies having offices in Denmark, Germany, the UK, Canada, and France, among other countries. The companies will have to combine these sales offices and close the ones that now are overlapping.
But the companies do not plan to make drastic measures immediately.” Only after enough study will it become clearer as to what would happen,” said Richardson. “The vast majority of what we offer and what they have are complementary.”