Executive Briefing
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QIAGEN, Tecan and Thermo Fisher Raise Sales Forecasts

Washington, DC 12/1/20; Männedorf, Switzerland 12/1/20; Venlo, the Netherlands 12/8/20—Three lab instrument tool firms have raised their 2020 revenue forecasts. Thermo Fisher Scientific now expects organic sales to grow 40% in the fourth quarter, up from an initial estimate of 29% (see IBO 11/16/20), according to an SEC filing. This would result in 22% organic growth for the year. The company also expects 2020 adjusted EPS to grow 55% to $19.17, versus an earlier estimate of 48% growth.

Swiss firm Tecan has also raised its full-year sales forecast from growth in the high single digits in local currency (see IBO 9/15/20) to growth in the low to mid-teens. The increase was attributed to strong revenues and COVID-19-related demand. The company also updated its EBITDA margin expectation to 20.5% of sales from the “closer to 20% of sales” estimate made in August. The revisions are also based on currency changes and benefits of scale tied to higher volumes.

QIAGEN also updated its expectations for fourth quarter and provided full-year sales guidance for 2020 and 2021. Fourth quarter sales are estimated to rise a minimum of 32% at constant exchange rates (CER), versus a previous forecast of 24%–27%. Quarterly adjusted EPS is expected to increase to $0.64–$0.65, up from the previous forecast of $0.58–$0.60 and up from $0.48 a year ago.

QIAGEN 2020 revenues are forecast to increase approximately 22%, whereas the previous estimate was around 20%. Adjusted EPS is estimated to hit $2.13–$2.14 compared to $1.43 in 2019 and the previous 2020 forecast of $2.07–$2.09.

QIAGEN also gave guidance for 2021, estimating a 18%–20% increase in revenues from the 2020 mid-point. Full-year adjusted EPS is expected to be $2.42–$2.46. The company attributed financial prospects to its five pillars of growth: sample technologies, QuantFERON for immune response testing, the NeuMoDx PCR system, the QIAstat-Dx syndromic testing solution and the QIAcuity digital PCR solution (see Agilent, PerkinElmer and QIAGEN Provide a New Look at Their Scientific Tool Businesses).

In October, Thermo Fisher had an estimated $1.8 billion in COVID-19-associated sales for the fourth quarter, a number that is likely higher now based on this latest news. The company’s third quarter sales grew 36%.

Indicative of the COVID-19 testing boost for QIAGEN, the company’s nine-month revenues for products used in COVID-19 testing totaled $418 million to make up 32% of company sales.

This is the second time this year Tecan has upped its guidance. In March, it forecast sales to rise mid- to high-single digits in local currency and an EBITDA margin of around 19.6%. Tecan’s pipette tips are used for COVID-19-related lab testing.

MTS Systems Set to Be Acquired

Wallingford, CT & Eden Prairie, MN 12/9/20—Amphenol has agreed to purchase MTS Systems, a provider of advanced tests systems, motion simulators and precision sensors. Publicly held Amphenol, an interconnect, antenna and sensor solutions company, will pay approximately $1.7 billion, net of cash, or $58.50 per share. “This acquisition is consistent with our strategy of continuing to expand our range of sensor and sensor-based products across a wide array of industries to further capitalize on the long-term growth potential of the electronics revolution,” commented Amphenol President and CEO R. Adam Norwitt. MTS Systems’ Sensors segment will complement Amphenol’s portfolio, and Amphenol will conduct a strategic review of MTS Systems’ Test & Simulation business. Amphenol expects MTS Systems to be accretive to EPS in the first year after closing, with $0.10 attributable to the Sensors segment and $0.06 attributable to Test & Simulation.

In 2019, Amphenol recorded $8.225 billion in sales. The price per share represents a 52.7% premium to MTS Systems’ closing price the day prior to the announcement. The Materials segment of MTS Systems’ Test & Simulation segment is the second-largest provider of physical testing systems (as defined by Strategic Directions International (SDi): universal, fatigue, hardness, impact and other testing systems). In fiscal 2020, MTS Systems sales declined 7.2% to $828.6 million (see Bottom Line), with Materials accounting for 30% of the company’s Test & Simulation business, or about $147 million.

The decline in sales was the result of COVID-19-related impacts as the company primarily serves industrial end-markets. Measures taken in response include cost reductions, restructuring and a suspension of dividend payments (see IBO 5/1/20). In May, the company named an interim CEO (see IBO 9/15/20).

ZEISS Invests in Imaging Software

Jena and Munich, Germany, 12/7/20—ZEISS Research Microscopy Solutions, which provides light, electron, x-ray and ion microscope solutions, has acquired a majority stake in arivis. Financial details were not disclosed. The companies were previously partners. Arivis provides microscopy imaging analysis software for life science applications, including 3D imaging and big data solutions. "With this combination of the businesses, we are significantly developing our software competences further in the area of microscopy solutions for research especially when it comes to 3D image processing, visualization and analysis,” commented Dr. Michael Albiez, Head of ZEISS Research Microscopy Solutions. “Modern microscope systems with high-resolution optics are recording ever increasing amounts of data, and advanced software solutions help researchers to effectively analyze their data in a streamlined way, increasing their efficiency in research.” All of arivis’ imaging solutions employees will remain with the company.

The companies have been partners since 2014. According to Dun & Bradstreet, arvis annual revenues topping $13 million. Its informatics solutions are used with super-resolution microscopy, among other microscopy techniques, in applications such as cellular imaging and analysis.

Sartorius Adds to Filtration Business

Göttingen, Germany 12/9/20—Sartorius has purchased cross flow filtration firm WaterSep BioSeparations for $27 million and an earn-out worth up to $9 million. With 2020 revenues of $2.5 million, WaterSep BioSeparations provides hollow-fiber membrane devices and pre-sterilized assemblies for bioprocessing. Based in the US, the company has 15 employees and a double-digit EBITDA margin. “This acquisition nicely complements our current offering for cell and gene therapy applications, cell harvesting and various solutions for intensified bioprocessing,” said Dr. René Fáber, Head of the Sartorius Bioprocess Solutions Division and Executive Board member.

WaterSep’s product line includes single-use and reusable filtration cartridges. Sartorius is well-established in crossflow filtration (tangential flow filtration) using membranes, including hollow fiber, for both lab- and industrial-scale applications.

Certara Completes IPO

Princeton, NJ 12/3/20; Princeton, NJ 12/11/20—Biosimulation software firm Certara has gone public on the Nasdaq market (see IBO 12/1/20) at a price per share of $23, with expected gross proceeds of $336.5 million before expenses and underwriting discounts and commissions. Earlier in the month, the company had priced the offering at $19–$22 per share.

Reuters reported that Certara upsized the number of shares offered by 19%, resulting in $670 million raised. The stock closed on December 14 at $33.59 per share.

Seer Share Price Skyrockets

Washington, DC 11/30/20; Redwood City, CA 12/3/20; Washington, DC 12/4/20: Redwood City, CA 12/8/20 —Proteomics technology provider Seer went public (see IBO 11/15/20) on December 4 at a price per share of $19. Gross proceeds totaled $201.3 million before deducting underwriting discounts and commissions and other offering expenses and with underwriters having exercised their option to purchase shares. The company had previously announced a price per share of $16–$18. The offering closed December 8.

The upsized offering debuted at $48 per share and closed at $66.29 per share on December 14. As of September 30, Seer had 60 employees.

908 Devices Sets IPO Terms

Boston, MA 12/14/20—908 Devices, which provides purpose-build handheld MS systems for chemical and biomolecular analysis, has announced that it plans to offer 6,250,000 shares at price of $15–$17 per share in its IPO (see IBO 12/1/20). The stock will trade on the Nasdaq Global Market under “MASS.” Net proceeds will be used to grow commercial operations and fund R&D and may be also used for acquisitions. The company has commenced its roadshow.

An offering of $16 per share is estimated to net $90.3 million, or $104.3 million if the underwriters exercise their option in full. The company wrote in its latest SEC filing: “Without giving effect to the net proceeds from this offering, we expect that our existing cash as of December 31, 2019 will be sufficient to fund our operating expenses, capital expenditure requirements and debt service payments into the third quarter of 2021.”

Calibre Scientific Expands in North America

Los Angeles, CA 12/14/20—Calibre Scientific, which provides life science reagents, tools, instruments,?and other consumables to the lab research, diagnostics, industrial, and biopharmaceutical communities, has acquired Canadian Life Science (CLS) for an undisclosed amount. The North American distribution to be purchased by Calibre Scientific, CLS distributes a range of consumables products, specializing in chromatography products. CLS is a Calibre Scientific distributor. “The regional and technical expertise of Canadian Life Science will enable Calibre Scientific to expand our pan-European distribution network into North America, creating exciting opportunities for co-sales as we increase the scope of our customer interactions through the breadth and depth of the product offering we can bring into the region,” said Mike Brownleader, Calibre Scientific’s Chief Revenue Officer.

This is Calibre Scientific’s fourth acquisition this year, including the October purchase of a European distributor (see IBO 11/1/20). In June, Calibre Scientific received a $92 million multicurrency first lien credit facility from CVC Credit Partners to support future growth (see IBO 7/15/20). Calibre Scientific is owned by private equity firm StoneCalibre.