Trinity Biotech acquires coagulation product line of bioMerieux for $51.9 million

By E. Janene Geiss

Philadelphia, May 25 - Trinity Biotech plc said Thursday that it has signed a binding agreement to acquire the coagulation product line of bioMerieux for a total consideration of up to $51.9 million.

The bioMerieux coagulation product line comprises a comprehensive portfolio of diagnostic tests manufactured primarily in Durham, N.C., and a complete range of automated instruments primarily manufactured in St Louis, according to a company news release.

Trinity said it will pay $40 million on closing with a maximum of $6.4 million after 12 months and a maximum of a further $5.5 million after 24 months.

Of these combined deferred payments, an amount of $5.5 million is contingent on the achievement of certain milestones for the product line during the remainder of 2006.

The transaction will be funded from a combination of cash and bank debt and is expected to close in late June, officials said.

The worldwide coagulation testing market is valued at $600 million and is growing at 5% per year, officials said.

Every hospital needs to undertake coagulation testing resulting in more than 25,000 clinical laboratories performing coagulation testing globally.

Following the merger of Trinity's existing Biopool and Amax coagulation product lines with the bioMerieux product line, it is estimated that Trinity's share of the worldwide coagulation market will be 13%, the company said.

The bioMerieux product portfolio comprises a range of automated instruments including the MDA, MTX and Thrombolyzer, which are comparable with various instruments within the Trinity Destiny instrument range.

The company said that bioMerieux has a strong global position in the coagulation market, especially in the United States, United Kingdom and Germany, where Trinity sells directly. This will result in considerable synergies in which Trinity will incur modest incremental sales and marketing costs, officials said.

As part of the transition, Trinity said it will transfer production of the diagnostic tests and instruments from bioMerieux's facilities in North Carolina to Dublin and from St Louis to Jamestown, N.Y., respectively.

During this transition process, Trinity said it will combine the best of the bioMerieux, Biopool and Amax instrument and reagent product ranges with a view to creating a best-in-class instrument and reagent platform for the combined customer base.

In this context, Trinity said it will be discontinuing various existing coagulation products and this will result in a once-off write-off of inventory in the amount of $5.8 million.

"Despite the fact that there will be substantial costs incurred during the next 18 months on the technology transfer from the United States to Ireland, we expect the acquisition to be immediately earnings accretive and in 2007 it should add approximately $40 million to our revenue and increase our operating profit by between $5 million and $6 million," said Ronan O'Caoimh, chief executive officer of Trinity, in the release.

Trinity, based in Dublin, Ireland, makes and sells more than 500 diagnostic products for the point-of-care and clinical laboratory segments of the diagnostic market.

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