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PerkinElmer to Buy Horizon Discovery for $383M

NEW YORK – PerkinElmer has reached an agreement to acquire cell engineering firm Horizon Discovery Group for about $383 million, the companies announced on Monday.

The all-cash deal has a total enterprise value of $368 million and is expected to close in the first quarter of 2021, they said. As a result of the acquisition, PerkinElmer will be able expand its portfolio of automated life sciences discovery and applied genomics products to include gene editing and gene modulation tools, the Waltham, Massachusetts-based firm said, adding the acquisition will provide it with tools to explore next-generation cell engineering and customized cell lines for relevant biological models, which will be crucial for future precision medicine applications.

The firms' complementary offerings of genotypic and phenotypic methods for drug discovery and development will accelerate decision-making by researchers with improved information, workflows, as well as better quality and control over data, they said.

"One of the key fundamentals for molecular research and drug discovery is being able to knock down a gene or function and explore the results to discover actionable insights and new clinical trial candidates faster," PerkinElmer President and CEO Prahlad Singh said in a statement. "We're excited to team up with Horizon to not only add CRISPR and RNAi capabilities into our existing portfolio, but also to leverage our combined life sciences screening and applied genomics solutions to help propel the next phase of cell and gene research for precision medicine."

Based in Cambridge, UK, Horizon Discovery provides CRISPR and RNAi reagents, cell models, cell engineering, and base editing tools. It also has offices in the US and Japan and employs about 400 people.

The company reported revenues from continuing operations of $75.5 million in 2019. In August, it said that revenues for the first half of 2020 dipped about 14 percent year over year to  £22.4 million ($29.3 million).

Its customers work in three segments of the therapeutic space – basic research, drug discovery and development, and therapeutic applications.

In a research note on Monday, Cowen analyst Doug Schenkel said that as a standalone company, Horizon Discovery was limited by its scale in its ability to grow its business in spite of its "solid product portfolio." PerkinElmer will be better able to leverage its global footprint and customer relationships to "better serve the addressable market." He also expects PerkinElmer will "generate meaningful cost synergies given the overlap of customers and geographic footprint."

The acquisition is expected to be mostly accretive to PerkinElmer's non-GAAP earnings in the first year after the close of the deal, it said, adding it anticipates Horizon Discovery's business to be "attractively positioned" in markets that are expected to grow at a compound annual growth rate of high-single digits over the next few years.

In early morning trading on the Nasdaq on Monday, PerkinElmer's shares were up about 2 percent to $132.55.

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