Abcam (AIM:ABC) PLC shares rose on Monday as the research tools maker said it had struck a deal to acquire BioVision Inc, a subsidiary of chemicals firm Chinese firm NKY Medical Holdings, for US$340mln in cash.
BioVision distributes research tools and has a strength in the assay kits market, Abcam said, adding that the purchase will bring one of its large third-party suppliers in-house.
The group said the takeover will accelerate its strategy to focus on in-house innovation and products in the biochemical and cell-based assay market, with the acquisition expected to be accretive to earnings from the first full year of ownership following completion of the acquisition, expected at the end of 2021.
As part of the deal, Abcam said it has also signed a memorandum of understanding with NKY Medical to establish a partnership for the development and supply of products and services into the Chinese market.
“We know the BioVision business well, having been a major distributor of their products since 2003. This acquisition represents a compelling opportunity to secure a proven portfolio of high-quality products, including a leading portfolio of biochemical and cell-based assay kits, that will allow us to better serve customer needs. BioVision has sustained strong growth over many years and, together with Abcam’s brand, reach and capabilities, we are confident we are well-positioned to build on this success and reinforce Abcam’s ability to serve life scientists globally”, Abcam chief executive Alan Hirzel said in a statement.
In a note on Monday, analysts at broker Peel Hunt said BioVision has a “strong strategic fit…and should keep revenue growth and margin heading in the right direction”.
Investors seemed to agree, with Abcam shares rising 3.6% to 1,407p in late afternoon trading.