Fullerton-based Beckman Coulter Inc. said Friday that it will spend $800 million to buy Olympus Corp.’s laboratory-based medical diagnostics business.
The deal is the largest for Beckman since its predecessor, Beckman Instruments Inc., bought Coulter Corp. in 1997 to create the current Beckman Coulter for $1.15 billion.
Two years ago, Beckman had planned to buy San Diego-based Biosite Inc. for $1.6 billion, but eventually walked away from that deal.
Olympus is a Japanese healthcare, life sciences and consumer electronics business. The diagnostics business that Beckman’s buying is part of Olympus’ life science unit.
Chief Executive Scott Garrett called Olympus’ diagnostics business “a very, very good fit with Beckman Coulter.”
Getting the diagnostic unit, Garrett said, would have a big impact in Europe — he noted that half of Olympus’ diagnostic sales come from Europe, with 30% in the U.S. and 20% in the rest of the world, including Japan and other parts of Asia.
The deal, Garrett said, “is very well suited to the large laboratories that are very commonly encountered in Europe.” The deal is also expected to provide Beckman with new chemistry products and bring new customers to its immunoassay tests, which use chemicals to test for a concentration of a substance in urine or blood. Those are routine tests done by labs, hospitals and other healthcare providers.
Beckman makes medical testing instruments and supplies used to run them.
The deal’s expected to close in the third quarter of this year, pending regulatory approvals.
Beckman said it would pay for the deal with a mix of $300 million in newly issued stock and $500 million in newly issued debt.
“We believe (the deal) is going to be very conservatively financed,” Garrett said.
The company will maintain a “strong balance sheet, excellent liquidity and therefore, investors should not see this as something that can’t be easily afforded by Beckman Coulter,” Garrett said.
Garrett was also confident about issuing new debt to buy the Olympus unit, saying that credit markets were very open to investment-grade companies such as Beckman.
In a statement, Beckman said it didn’t think ratings agencies would revise their outlooks based on the new debt.
Beckman said the deal would add $40 million to $50 million in profit in 2010, along with $500 million in revenue.
The company didn’t say if the buy would increase its profit this year or be neutral; it also said it could save an additional $50 million to $60 million by integrating its activities with those of the Olympus unit.
Beckman has said it expects to post a profit of $245.7 million to $258.4 million on revenue of $2.4 billion to $3.2 billion in 2009.
