Repligen Corporation (NASDAQ:RGEN), a life sciences company focused
on bioprocessing technology leadership, today announced that it has
entered into a definitive agreement to acquire privately-held C
Technologies, Inc. for approximately $240 million, comprised of
$192 million in cash plus $48 million in Repligen common stock. C
Technologies recorded revenue of $23.7 million in 2018, and is
projected to generate $27-$29 million in revenue (pro forma) in
2019, led by the success of its SoloVPE product-line which is
considered a gold standard for measuring protein concentration in
biopharmaceutical manufacturing. We believe the acquisition
of C Technologies will establish Repligen in the rapidly growing
Process Analytics segment of bioprocessing with best-in-class
protein measurement technologies and a strong foundation for
next-generation product development.
C Technologies is an analytics company with a market-leading
portfolio of spectroscopy products used primarily in
biopharmaceutical manufacturing. Over the past 10 years, C
Technologies’ SoloVPE platform has become a standard in quality
control and process development labs and in production-scale
manufacturing for off-line or at-line protein concentration
measurement. Use of the VPE technology delivers accurate and
consistent protein measurement results to customers, eliminating
the need for manual and time-consuming sample dilution while
reducing time to results. More recently, C Technologies introduced
its FlowVPE technology, which features in-line protein
concentration measurement in filtration, chromatography and
fill-finish applications. A key benefit of this in-line solution is
the ability to monitor a manufacturing process in real time.
Tony J. Hunt, President and CEO of Repligen said, “The addition
of C Technologies is a major step forward in building out a Process
Analytics franchise for Repligen. We are excited to have Craig and
the C Technologies team join Repligen. We look forward to further
developing the core Slope Spectroscopy® technology for real-time
bioprocess applications. We also plan to invest in expanding C
Technologies’ commercial team to support broader global adoption of
SoloVPE and FlowVPE, while continuing to deliver on the exceptional
customer service for which C Technologies is well known. We believe
that our acquisition of C Technologies will contribute to our
continued growth in upstream and downstream markets and build on
our strong first quarter performance.”
Craig Harrison, President and CEO of C Technologies said, “We
are very proud of the progress and impact we have made in biopharma
over the past decade. Our culture of technology innovation and
customer centricity is what differentiates us and where we feel a
real affinity with Repligen. We look forward to driving expanded,
global adoption of our products, and continuing to advance SoloVPE
and FlowVPE as standards in the industry for off-line, at-line and
in-line protein concentration measurement”.
Strategic and Financial Benefits of the
Transaction
- Establishes a key franchise for Repligen in the rapidly
growing process analytics segment of bioprocessingC
Technologies adds a fourth franchise - Process Analytics - to
Repligen’s bioprocessing portfolio, complementing our Filtration,
Chromatography and Proteins businesses. As the industry implements
single-use solutions and drives process efficiency with faster
turn-around between production campaigns the need for off-line,
at-line and in-line measurement technologies has become more
critical. C Technologies’ SoloVPE and FlowVPE product lines address
these needs with rapid, accurate and consistent results while
significantly reducing overall time to results for customers.
- Adds a market-leader in protein concentration
measurement with novel spectroscopy technology to our
portfolioC Technologies is a technology and market leader
in bioprocess analytics focused on protein concentration
measurement in bioprocessing applications. C Technologies has
established a spectroscopy portfolio – encompassing systems,
consumables and services – based on its patented Slope
Spectroscopy® solution with variable path length extension (VPE)
technology. C Technologies products have become widely adopted in
process development, manufacturing and in quality control
labs.
- Significantly expands capabilities to enable real-time
process monitoring in batch and continuous
manufacturingFlowVPE systems allow for in-line protein
concentration measurement, improving overall chromatography
performance and enabling real-time accurate final protein
measurements in TFF filtration and final formulation. The FlowVPE
system can be used in both batch and continuous manufacturing
making it well-positioned for increased industry adoption.
- Provides significant opportunity to expand global
market reach through investments in C Technologies’ commercial
infrastructure and in accelerated development of next-generation
productsRepligen plans to expand C Technologies’ global
presence by investing in its commercial organization across regions
and increasing R&D funding to accelerate development of
next-generation products, including technologies that align with
Repligen’s filtration and chromatography systems strategy.
- Positive projected financial impactC
Technologies recorded $23.7 million of revenue for 2018 and has
grown its revenue at an annual CAGR of approximately 20% since
2015. Its products are expected to add $16-$17 million to Repligen
revenue in 2019, assuming a 7-month period of Repligen ownership.
For the full year 2020, C Technologies is expected to contribute
$32-$34 million in incremental revenue, at gross margins well above
Repligen’s corporate average of 56%-57% per Repligen’s most recent
2019 guidance. Repligen expects the transaction to be
accretive to its overall EBIT margins and accretive to adjusted
earnings per diluted share (EPS) in 2019.
Approvals and FinancingThe transaction is
expected to be completed during the second quarter of 2019, subject
to the satisfaction of customary closing conditions, including the
expiration or termination of the waiting period under the
Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976.
To fund the transaction, Repligen intends to use its cash on hand,
which totaled approximately $194 million at December 31, 2018 and
potentially a committed debt financing of $125 million that it has
obtained from J.P. Morgan Chase & Co.
Perella Weinberg Partners LP is acting as financial advisor and
Goodwin Procter LLP is serving as legal counsel to Repligen.
J.P. Morgan Chase & Co. is serving as lender, lead arranger and
the sole administrative agent under the committed debt financing
and Simpson Thatcher served as its legal advisor.
First Quarter Preliminary Financial
ResultsRepligen is today announcing preliminary financial
results for its first fiscal quarter of 2019. For the three month
period ended March 31, 2019, Repligen expects to report revenue in
the range of $60-$61 million, representing organic growth of
35%-37%, compared to $44.8 million in revenue for the three months
ended March 31, 2018. The Company expects to report fully diluted
GAAP earnings per share (EPS) for the first quarter of 2019 of
$0.16-$0.17, compared to $0.08 for the same period in 2018.
Repligen expects to report adjusted EPS (non-GAAP) for the first
quarter of 2019 of $0.27-$0.28, compared to $0.17 for the same
period in 2018. Adjustments to preliminary GAAP EPS,
reconciling to preliminary adjusted EPS, include the following
estimated adjustments: acquisition and integration costs of $0.04,
intangible amortization of $0.06 and non-cash interest expense of
$0.02, and the tax effect of intangible amortization and
integration costs (-$0.01), each per fully diluted share.
These financial results are preliminary estimates based on
information available to management as of the date of this press
release, and actual financial results could change. Repligen’s
actual financial results for its fiscal first quarter ended, March
31, 2019 are subject to the completion of its financial statements
for the quarter.
Use of Non-GAAP Financial MeasuresThe following
non-GAAP measure of financial performance is included in this
release and/or the slide deck that accompanies today’s webcast:
adjusted earnings per diluted share (EPS). Adjusted EPS
excludes gains or losses that are either isolated or cannot be
expected to occur again with any regularity or predictability, tax
provisions/benefits related to the previous items, benefits from
tax credit carryforwards, and the impact of tax audits or events.
In addition, our preliminary adjusted EPS estimates for the
first quarter of 2019, as noted above, exclude: acquisition and
integration costs, intangible amortization, non-cash interest
expense and the tax effect of intangible amortization and
acquisition costs. We exclude the above items because they are
outside of our normal operations and/or, in certain cases, are
difficult to forecast accurately for future periods. We believe
that the use of non-GAAP measures helps investors to gain a better
understanding of our core operating results and future prospects,
consistent with how management measures and forecasts the company's
performance, especially when comparing such results to previous
periods or forecasts.
Conference Call and Webcast Repligen management
will host a conference call and webcast at 8:30 am ET today to
provide more information on this announcement. The webcast
and accompanying slides can be accessed in the Investor Events
& Presentations section of Repligen’s website. An audio
archive of the call will be available for a limited period of time
following the event.
Live event webcast link (with slides):
Repligen to Acquire C Technologies
Live event dial-in:Domestic:
1-866-777-2509International: 1-412-317-5413Conference ID: No
passcode required
Archived event dial-in:Domestic:
1-877-344-7529International: 1-412-317-0888Conference ID:
10131175
About C Technologies Inc.C Technologies, Inc.
is a privately-held, Bridgewater, NJ based company known for
innovation in spectroscopy. The company designs and manufactures
assemblies, instrumentation and systems for spectroscopy
applications, primarily for biotech and pharmaceutical customers,
and also for government, research institutions and academia. C
Technologies applies its decades of experience to create innovative
tools, processes, and solutions for analytical and process
challenges. C Technologies' products for protein
concentration measurement are being used to support the
development of new biologic and pharmaceutical
products. Its leading instruments, SoloVPE and FlowVPE feature
the company’s Slope Spectroscopy® which leverages the power of its
patented variable pathlength extension (VPE) technology. The result
is a relatively rapid, robust and repeatable concentration
measurement method for biologics, small molecules or any sample
traditionally analyzed with UV-Vis, overcoming the limitations of
fixed pathlength methods.
About Repligen Corporation Repligen Corporation
(NASDAQ:RGEN) is a global bioprocessing company that develops and
commercializes highly innovative products that deliver cost and
process efficiencies to biological drug manufacturers worldwide.
Our portfolio includes protein products (Protein A affinity ligands
including NGL Impact™-A, cell culture growth factors),
chromatography products (OPUS® pre-packed columns, chromatography
resins, ELISA kits) and filtration products (including XCell™ ATF,
TangenX™ SIUS™ TFF and Spectrum KrosFlo™ TFF filters and systems).
The Protein A ligands and growth factor products that we produce
are essential components of Protein A affinity resins used in
biologics purification, and cell culture media used to accelerate
cell growth in a bioreactor. Our innovative line of OPUS®
chromatography columns, used in bench-scale through
commercial-scale biologics purification, are delivered pre-packed
to our customers with their choice of affinity resin. Our XCell™
ATF Systems, available in stainless steel and single-use
configurations, are used in perfusion processes to continuously
concentrate cells and increase product yield from a bioreactor.
Single-use SIUS™ TFF cassettes and hardware are used for biologic
drug concentration in downstream filtration processes. KrosFlo™ TFF
cartridges and systems are used in both upstream and downstream
filtration processes. Repligen’s corporate headquarters are in
Waltham, MA (USA), with additional administrative and manufacturing
operations in Marlborough, MA, Rancho Dominguez, CA, Lund, Sweden
and Ravensburg, Germany.
Forward-Looking StatementsThe following
constitutes a “Safe Harbor” statement under the Private Securities
Litigation Reform Act of 1995: This press release contains
forward-looking statements, which are made pursuant to the safe
harbor provisions of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Investors are cautioned that statements in this press
release which are not strictly historical statements, constitute
forward-looking statements, including, without limitation, express
or implied statements or guidance regarding the expected results of
the proposed acquisition of C Technologies on Repligen’s future
financial performance, including the accretive nature and the
timing of the accretive nature of the acquisition, expected
synergies following the acquisition of C Technologies, customer
adoption of C Technologies’ products, the expected expansion of
Repligen’s product lines, the anticipated funding for the
acquisition, the timing of the closing of the acquisition,
Repligen’s preliminary estimates of its first quarter 2019
financial results, and other statements identified by words like
“believe,” “expect,” “may,” “will,” “should,” “seek,” “anticipate,”
or “could” and similar expressions. Such forward-looking statements
are subject to a number of risks and uncertainties that could cause
actual results to differ materially from those anticipated,
including, without limitation, risks associated with: the risk that
the proposed acquisition may not be completed in a timely manner,
or at all; the occurrence of any event, change or other
circumstance that could give rise to the termination of the
acquisition; our ability to integrate Spectrum’s business and
personnel and to achieve expected synergies; our ability to
maintain or expand Spectrum’s historical sales; our ability to
accurately forecast the acquisition, related restructuring costs
and allocation of the purchase price, goodwill and other
intangibles acquisition related and other asset adjustments; our
ability to develop and commercialize products and the market
acceptance of our products; reduced demand for single-use or
disposable bioprocessing products that adversely impacts our future
revenues, cash flows, results of operations and financial
condition; our volatile stock price; and other risks detailed in
Repligen’s most recent Annual Report on Form 10-K on file with the
Securities and Exchange Commission and the other reports that
Repligen periodically files with the Securities and Exchange
Commission. Actual results may differ materially from those
Repligen contemplated by these forward-looking statements. These
forward looking statements reflect management’s current views and
Repligen does not undertake to update any of these forward-looking
statements to reflect a change in its views or events or
circumstances that occur after the date hereof except as required
by law.
Repligen Contact: Sondra S. NewmanSenior
Director Investor Relations(781) 419-1881investors@repligen.com
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