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Tecan Acquires NuGen for $54.5M

NEW YORK (GenomeWeb) – Swiss laboratory instrumentation and automation firm Tecan said on Thursday that it has acquired San Carlos, California-based sequencing sample prep company NuGen for $54.5 million in cash.

Tecan said that the acquisition, which is expected to close in the coming weeks, will enable it to expand into the genomics space through sales of NuGen's sample prep kits for next-generation sequencing and microarrays. NuGen sells genomic sample prep products for a broad range of sample types including RNA and DNA from whole tissues, preserved and prepared tissue samples, single cells, and liquid biopsies. As an example, Tecan highlighted NuGen's recently launched Celero DNA-Seq library preparation system for Illumina sequencers.

Tecan also noted that NuGen's technologies dovetail with its own laboratory automation platforms for the life sciences, which will result in new dedicated NGS sample prep workstations already under development at Tecan.

"NuGen's innovative NGS kits and genomic sample preparation solutions are an excellent complement to our industry-leading automated workstations for genomic applications," Tecan CEO David Martyr said in a statement. "Through this acquisition, we are accelerating our broad genomics strategy and further increase our recurring revenues. With further dedicated solution offerings in one of the fastest growing market segments in life sciences, we will be able to enhance the above-market-average growth of Tecan in years to come."

The purchase consideration of $54.5 million (CHF 54.1 million) represents a valuation of less than four times NuGen's expected fiscal year 2018 sales, Tecan said, adding that it expects to triple NuGen's sales in the next five years by leveraging its global sales and marketing force, which spans 52 countries. Tecan also said the acquisition in the near term will be modestly loss-making, but that it expects the transaction to become accretive to earnings per share before transaction-related amortization for 2022.

NuGen will be integrated into Tecan's life sciences business, which logged a year-over-year revenue increase of approximately 2 percent (about 1 percent in local currencies) for the first half of 2018 to CHF 140.5 million from CHF 138.2 million in H1 2017. Overall, Tecan's H1 revenues grew approximately 8 percent (7 percent in local currencies) year over year to CHF 273.5 million from CHF 252.2 million.

Tecan said that the impact of the NuGen acquisition depends on the exact timing of the transaction's closing and could generate additional sales in the low single-digit million Swiss franc amount.

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