Biotools M&A scene hot in 2021

By Tanya Samazan, The Science Advisory Board contributing writer

January 6, 2022 -- It was a busy year for the acquisition of biotool companies. Likewise, 2022 is expected to be another busy year for lab tool mergers and acquisitions (M&A). Private equity firms have targeted the industry, riding the wave of demand for life science solutions to advance R&D and production of biotherapeutics and gene and cell therapies, as well as to continue to serve fast-growing, publicly funded research markets in China and elsewhere.

Discussed below are a few of the notable transactions.

Largest acquisition

The year's biggest deal was PerkinElmer's $5.25 billion purchase -- the largest in PerkinElmer history -- of antibody supplier BioLegend. BioLegend is on track to generate $380 million in sales in 2022. PerkinElmer completed the transaction in September 2021, creating a $700 million life science reagent business and a $1.5 billion life science business. Company sales totaled $3.8 billion in 2020.

PerkinElmer President and CEO Prahlad Singh told investors, "The addition of BioLegend expands our presence in the attractive high growth antibody and cytokine market, enhances our content-development capabilities across all PerkinElmer detection technologies and transforms our e-commerce scale overnight."

With the purchase, PerkinElmer becomes a major supplier of research antibodies worldwide after little to no presence in the market beforehand. BioLegend offers monoclonal, polyclonal, and recombinant monoclonal and recombinant primary and secondary antibodies. Major competitors in the research antibody market include Abcam, Thermo Fisher Scientific, and Bio-Techne, according to Strategic Directions International (SDi, a sister publication of ScienceBoard).

BioLegend is one of the recent acquisitions involving private research antibody providers. Other companies acquired include Bethyl Laboratories last year and Absolute Antibody in 2020.

Highest number of acquisitions

Swedish life science firm BICO announced nine acquisitions in 2021, putting it among the busiest companies in the lab tools space last year in terms of M&A. In total, BICO allocated more than $400 million to acquisitions during the year. BICO provides instruments, consumables, and services for bioscience and industrial application, with a focus on bioprinting, biosciences, and bioautomation. In 2020, the publicly held company posted 365 billion Swedish kronor ($40 million) in revenues.

BICO's string of acquisitions in 2021 included two buyouts valued at more than $100 million. In December, the company purchased Biosero, a lab automation software firm, for an estimated $165 million in cash, stock, and future earnouts. Biosero is expected to generate 2021 sales of $26 million. Biosero competitors include Thermo Fisher Scientific, Danaher, and Hudson Robotics.

"With Biosero we take a significant and strategized step in expanding our portfolio with combinatorial smart software systems to enable automated workflows," stated Erik Gatenholm, CEO and co-founder of BICO. "The Biosero software platform will serve as a glue to our impressive portfolio of hardware instruments and solutions, tying together the great hardware technologies we have acquired over the years."

BICO also purchased Discovery Echo, spending an estimated $110 million in cash and stock. Forecast to post 2021 sales of $20 million, Discovery Echo develops and sells hybrid microscopes capable of upright or inverted configurations. Discovery Echo's primary competition in the research optical microscopy market (comprising compound, stereo, and digital imaging systems) are Danaher and Zeiss, according to SDi.

"With Discover Echo's revolutionary microscopy technology and disruptive product line, we further complement our existing bioconvergence products and capture strong cross-selling synergies," Gatenholm stated.

BICO now consists of 14 subsidiary businesses, including Cytena and Scienion. But BICO has said it plans to slow its pace of acquisitions so it can concentrate on integrating its product lines into workflow offerings.

Consolidation in the market

The laboratory software market, consisting primarily of instrument-specific software, electronic lab notebooks (ELNs), laboratory information management systems (LIMS), and lab operations systems, has traditionally been a highly fragmented market. In 2021, Insightful Science led consolidation in the market with three purchases, adding to its offering that already included a range of life science software plus contract research organization Cytapex Bioinformatics.

Insightful Science pursued two tracks last year, continuing to grow its ELN and LIMS businesses and adding software specifically for analysis of instrument data. Last spring, the firm purchased Dotmatics, which provides software for data management and analysis, such as ELN and LIMS solutions, expanding Insightful Science's research labs and solution capabilities.

"Together our complementary businesses create an end-to-end cloud-first scientific research platform that stands apart in our collective ability to support data-driven research," Thomas Swalla, CEO of Insightful Science, said.

Further adding to its LIMS and ELN portfolio, Insightful Science acquired LabArchives in the fall. Swalla stated, "By expanding our portfolio to include LabArchives, we offer the only true end-to-end cloud-solution for R&D whether you're in a leading research institution, university or commercial organization." Major LIMS and ELN providers include LabWare and Thermo Fisher Scientific.

Insightful Science further added solutions addressing specific analytical technologies, acquiring De Novo Software and Protein Metrics in 2021. De Novo's FCS Express is used to analyze flow cytometry data. Among De Novo's competitors are Becton Dickinson and Beckman Coulter. Protein Metrics' Byos, Byonic, and Byosphere offerings are designed to assist in the analysis and management of mass spectrometry data for proteomics and biotherapeutics development. Protein Metrics is Insightful Science's first purchase serving the proteomics market. Open-source solutions are among Protein Metric's most significant competitors.

Outlook for 2022

In 2022, private equity firms expect larger companies, such as Danaher and Thermo Fisher Scientific, to follow their pattern of making acquisitions of life science tools a priority.

Another set of active buyers could be newly public biotool companies. With cash raised through their initial public offerings (IPOs), these firms could look to invest in M&A. Among the firms that completed IPOs in 2021 that then sought out immediate acquisition opportunities were flow cytometer maker Cytek Biosciences and sample handling and preparation lab equipment firm Trajan Scientific and Medical.

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