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Acquisition of US-based NuGEN
expands Tecan's dedicated solutions offering into new market
segment of next-generation sequencing (NGS) reagents and increases
overall recurring revenues
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NuGEN provides innovative NGS
kits and genomic sample prep reagents for the fastest growing field
within the genomics area
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NuGEN to
become part of Tecan's Life Sciences Business, leveraging Tecan's
global presence and strong position in NGS
sample preparation automation platforms
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Consideration of USD 54.5
million (CHF 54.1 million) representing less than four times
expected fiscal year 2018 sales of NuGEN
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Tecan anticipates to triple
NuGEN's sales by 2023
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Total sales of more than CHF 75
million from execution of broad genomics strategy expected by 2023,
including NuGEN and new workstations
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Closing of the transaction
expected within the coming weeks
Männedorf, Switzerland, August 16 2018 - The Tecan
Group (SIX Swiss Exchange: TECN) announced today the acquisition of
US-based NuGEN Technologies, Inc. to further expand Tecan's
dedicated solutions offering into the new market segment of
next-generation sequencing (NGS) reagents and thus further
increasing Tecan's overall recurring revenues. NuGEN is a leading
provider for innovative NGS kits and genomic sample preparation
solutions for the fastest growing field within the genomics area,
serving customers in life science research and applied markets. As
part of Tecan's Life Sciences Business, NuGEN will benefit from
Tecan's global presence, customer base and strong position serving
the market with automation platforms optimized for NGS sample
preparation.
The purchase
consideration of USD 54.5 million (CHF 54.1 million) will be fully
paid in cash and represents a valuation of less than four times
expected fiscal year 2018 sales of NuGEN. Tecan anticipates to
triple NuGEN's sales in the next five years by leveraging its
global presence and by expanding sales capabilities in key regions.
Together with an accelerated execution of its broad genomics
strategy enabled by this transaction, including NuGEN and new
dedicated workstations which are already under development, Tecan
expects to generate total annual sales of more than CHF 75 million
through this initiative by 2023. While currently modestly loss
making, Tecan expects the transaction to become accretive to
earnings per share (EPS) before transaction-related amortization
for 2022. The closing of the transaction is anticipated within the
coming weeks.
An expected impact of the acquisition on Tecan's 2018 financial
results was published today in a separate press release announcing
financial results for the first half of 2018.
Tecan CEO Dr. David
Martyr commented: "NuGEN's innovative NGS kits and genomic sample
preparation solutions are an excellent complement to our
industry-leading automated workstations for genomic applications.
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. NuGEN will become
our center of excellence for NGS reagents and we are delighted to
welcome the new colleagues into Tecan."
Nitin Sood, CEO of
NuGEN and designated Vice President and General Manager of Tecan's
NGS reagents business, said: "We are very excited to join forces
with Tecan to combine our market leading Next Generation Sequencing
library preparation technologies with Tecan's core competencies in
automation and detection to deliver complete solutions to our
customers. Tecan's global footprint and depth of capabilities will
accelerate our innovation pipeline, bringing benefits to our
customers and employees."
A
leading provider for NGS sample preparation reagents
NuGEN provides innovative genomic sample preparation for
next-generation sequencing (NGS) and microarrays for a broad range
of sample types including RNA and DNA from whole tissues, preserved
and prepared tissue samples (FFPE, Formalin-Fixed
Paraffin-Embedded), single cells and liquid biopsies such as from
blood samples. An example of NuGEN's innovation capabilities is the
newly launched Celero(TM) DNA-Seq with NuQuant library system which
provides researchers with a simplified library preparation workflow
with integrated quantification for DNA sequencing. Next-generation
sequencing technologies are currently transforming the life
sciences, e.g. the field of cancer research, due to the wealth of
genetic information obtained.
NGS workflows are
composed of multiple complex steps, several of which need to be
performed prior to loading samples in the actual sequencer. The
most critical step prior to sequencing is the so called library
preparation, in which many samples are processed in parallel and
its correct performance is key to match the individual DNA
sequences with the respective samples again after sequencing. The
quality of prepared libraries has a significant impact on the
sequencing process, the reproducibility and usability of the data
and thereby ultimately on the overall data quality. With large
numbers of samples being processed, library preparation can
actually cost more than the sequencing itself.
The market for library
preparation has been expanding with a rate of above 10% and with an
estimated size of more than one billion US dollars, it represents a
significant share of the overall about 6 billion US dollars
sequencing market. Costs associated with NGS overall are dropping,
making the technology more affordable and widely accessible. A
higher adoption of NGS and fast growing sample numbers increase the
need for automation, a particular strength of Tecan, especially in
the genomics area. With automation, labs can increase the
throughput and eliminate unnecessary manual steps and sources of
error. NuGEN's products are automation friendly and offer rapid and
simple workflows designed to reduce time and cost per sample.
Together with NuGEN, Tecan can leverage its automation expertise
and leading position within the market for genomic instruments to
offer complete solutions for NGS library preparation, comprising
dedicated workstations, accompanying consumables and differentiated
NGS reagents. With the Company's global presence, Tecan sees an
opportunity to expand the business with an increased presence in
North America, Europe as well as expanding sales capabilities in
China.
Established in 2000,
NuGEN is well-embedded in the biotech center of the Silicon Valley,
California (USA), and has over 70 employees.
Additional information
can be found on the NuGEN webpage:
www.nugen.com
About
Tecan
Tecan (www.tecan.com) is a leading global provider of laboratory
instruments and solutions in biopharmaceuticals, forensics and
clinical diagnostics. The company specializes in the development,
production and distribution of automated workflow solutions for
laboratories in the life sciences sector. Its clients include
pharmaceutical and biotechnology companies, university research
departments, forensic and diagnostic laboratories. As an original
equipment manufacturer (OEM), Tecan is also a leader in developing
and manufacturing OEM instruments and components that are then
distributed by partner companies. Founded in Switzerland in 1980,
the company has manufacturing, research and development sites in
both Europe and North America and maintains a sales and service
network in 52 countries. In 2017, Tecan generated sales of
CHF 548 million (USD 560 million;
EUR 494 million). Registered shares of Tecan Group are
traded on the SIX Swiss Exchange (TECN; ISIN CH0012100191).
For
further information:
Tecan
Group
Martin Braendle
Vice President, Communications & Investor Relations
Tel. +41 (0) 44 922 84 30
Fax +41 (0) 44 922 88 89
investor@tecan.com
www.tecan.com
Press Release