Meridian Bioscience Announces Agreement to Acquire Business of GenePOC; Adds State-of-the-Art Molecular Diagnostics Platform

CINCINNATI–(BUSINESS WIRE)–Meridian Bioscience, Inc. (NASDAQ: VIVO), a provider of diagnostic
testing solutions and life science raw materials, today announced it has
entered into a definitive agreement to acquire the business of GenePOC
Inc., a Quebec City, Quebec, Canada based provider of molecular
diagnostic instruments and assays. Founded in 2007, GenePOC has
approximately 100 employees and generated total revenues of less than $1
million in calendar 2018. Meridian has agreed to make a cash payment at
closing of the transaction of $50 million with future payments totaling
up to an additional $70 million contingent upon the successful
achievement of certain technical development milestones and sales
thresholds.

Strategic Fit and Rationale

With the acquisition, Meridian will be getting GenePOC’s state-of-the
art revogeneTM molecular diagnostics platform, which offers
sample to result testing for single tests, as well as flexible
multiplexing capability. The Company believes revogeneTM is a
perfect fit with Meridian’s stated strategy to provide gastrointestinal
disease and core respiratory illness diagnostics solutions for the
diverse needs of complex medical health systems. revogeneTM
is an FDA-cleared platform that currently has three FDA-cleared assays,
including C. difficile, Group A Strep, and Group B Strep.
Those three assays comprise a vast majority of Meridian’s current total
molecular diagnostics sales, thus enabling it to immediately offer this
new platform and technology to existing customers seeking better
workflow and less hands-on time than Meridian’s current AlethiaTM
molecular platform can provide. Over time, through its multiplexing
capability, revogeneTM is expected to allow Meridian to also
offer its customers smart panel solutions currently in development and
planning.

Jack Kenny, Chief Executive Officer, commented, “We are very excited to
be adding the GenePOC technology and team to Meridian. GenePOC provides
an exciting new state-of-the-art molecular diagnostics platform to our
Diagnostics portfolio. This is a critical element of our strategy to
re-position our Diagnostics business for sustainable long-term growth.
GenePOC’s revogeneTM platform is an excellent fit for our
customers and strategy to offer gastrointestinal-focused and other
targeted diagnostic solutions to meet the diverse needs of today’s more
complex health care system. We welcome the GenePOC team to the Meridian
family and look forward to leveraging Meridian’s strong and established
commercial infrastructure to offer revogeneTM and its menu of
assays to our current and new customers.”

Summary Transaction Terms and Impact

The cash-free/debt-free purchase price has a maximum potential value of
$120 million, with $50 million to be paid at closing (subject to a
holdback and working capital adjustment), subsequent payments of up to
$20 million in Meridian’s fiscal 2021 based on the achievement of
certain technical development milestones, and a final payment of up to
$50 million in fiscal 2023 based on both the sales performance of
certain molecular assays and their achievement of minimum profit margin
thresholds.

Excluding amortization expense, the Company expects the transaction to
add approximately $4 – $5 million in operating expenses in fiscal 2019
and $9 – $10 million in fiscal 2020, both net of planned cost synergies.
R&D Teams in both Quebec City and Cincinnati will continue and ramp up
work to develop new assays for revogeneTM and meaningfully
expand the menu of product offerings. As a result, the Company expects
R&D expense in the Diagnostics business to increase to the mid-teens as
a percent of sales. The Company expects the transaction to provide a net
positive contribution to run rate molecular sales and Company EBITDA
starting in fiscal 2021.

The transaction is subject to certain closing conditions of a
transaction of this nature. PNC Bank has committed financing and will
lead with Fifth Third Bank a transaction for a new $125 million
revolving line of credit to finance the acquisition and re-finance
Meridian’s current outstanding debt. The acquisition will also be
financed with cash. The Company expects the transaction to close no
later than early fourth quarter of fiscal 2019.

Conference Call

Meridian is holding a conference call at 10:00 a.m. Eastern Time today
to review the transaction and answer questions, as well as report its
fiscal second quarter results. To participate in the live call by
telephone from the U.S., dial (866) 443-5802, or from outside the U.S.,
dial (513) 360-6924, and enter the audience pass code 3893028. A replay
will be available for 14 days beginning at 1:00 p.m. Eastern Time on
April 30, 2019 by dialing (855) 859-2056 or (404) 537-3406 and entering
pass code 3893028.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this communication regarding the proposed
acquisition of the business of GenePOC by Meridian, including any
statements regarding the synergies, benefits and opportunities of the
transaction, future opportunities for the combined company and products,
future financial performance and any other statements regarding
Meridian’s future expectations, beliefs, plans, objectives, financial
conditions, assumptions or future events or performance that are not
historical facts are “forward-looking” statements made within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. The
words “anticipate,” “believe,” “ensure,” “expect,” “if,” “intend,”
“estimate,” “probable,” “project,” “forecasts,” “predict,” “outlook,”
“aim,” “will,” “could,” “should,” “would,” “potential,” “may,” “might,”
“anticipate,” “likely,” “plan,” “positioned,” “strategy,” and similar
expressions, and the negative thereof, are intended to identify
forward-looking statements.

All forward-looking information is subject to numerous risks and
uncertainties, many of which are beyond the control of Meridian, that
could cause actual results to differ materially from the results
expressed or implied by the statements. These risks and uncertainties
include, but are not limited to: the diversion of management time on
transaction-related issues; ability to successfully integrate the
businesses; risk that the transaction and its announcement could have an
adverse effect on the parties’ ability to retain customers and retain
and hire key personnel; the risk that any potential synergies from the
transaction may not be fully realized or may take longer to realize than
expected; and risks inherent in funding, developing and obtaining
regulatory approvals of new, commercially-viable and competitive
products. In addition, forward-looking statements may also be adversely
affected by general market factors, competitive product development,
product availability, federal and state regulations and legislation, the
regulatory process for new products and indications, manufacturing
issues that may arise, patent positions and litigation, among other
factors. The forward-looking statements contained in this communication
may become outdated over time. Meridian does not assume any
responsibility for updating any forward-looking statements. Additional
information concerning these and other factors can be found in
Meridian’s filings with the SEC and available through the SEC’s
Electronic Data Gathering and Analysis Retrieval system at www.sec.gov,
including Meridian’s most recent Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K. The foregoing list
of important factors is not exclusive. Meridian assumes no obligation to
update or revise any forward-looking statements as a result of new
information, future events or otherwise, except as may be required by
law. Readers are cautioned not to place undue reliance on these
forward-looking statements that speak only as of the date hereof.

About Meridian Bioscience, Inc.

Meridian is a fully integrated life science company that develops,
manufactures, markets and distributes a broad range of innovative
diagnostic products. We are dedicated to developing and delivering
better solutions that give answers with speed, accuracy and simplicity
that are redefining the possibilities of life from discovery to
diagnosis. Through discovery and development, we provide critical life
science raw materials used in immunological and molecular tests for
human, animal, plant, and environmental applications. Through diagnosis,
we provide diagnostic solutions in areas including gastrointestinal and
upper respiratory infections and blood lead level testing. We build
relationships and provide solutions to hospitals, reference
laboratories, research centers, veterinary testing centers, physician
offices, diagnostics manufacturers, and biotech companies in more than
70 countries around the world.

Meridian’s shares are traded on the NASDAQ Global Select Market, symbol
VIVO. Meridian’s website address is www.meridianbioscience.com.

Contacts

Jack Kenny
Chief Executive Officer
Meridian Bioscience, Inc.
Phone:
513.271.3700
Email: mbi@meridianbioscience.com

error: Content is protected !!