UPDATE: Corning To Buy Bulk Of Becton Dickinson's Lab Products
10 Aprile 2012 - 5:20PM
Dow Jones News
Corning Inc. (GLW) plans to pay roughly $730 million in cash to
acquire the bulk of Becton Dickinson & Co.'s (BDX) lab-products
business, snapping up a portfolio it said will significantly
increase its presence in the life-sciences market.
With sales of roughly $235 million expected this year, the
Discovery Labware unit will expand Corning's annual life-sciences
revenue by 40% and move it closer to its goal of being a $1 billion
business by 2014, said Corning Chief Executive Wendell P.
Weeks.
"The Discovery Labware unit's extensive product portfolio and
established dealer network will significantly improve Corning Life
Sciences' offerings to customers and is a critical part of
Corning's long-term growth strategy," Weeks said.
The purchase, expected to close later this year, excludes the
unit's advanced bioprocessing platform. It is expected to begin
adding to Corning's earnings in 2013.
"Becton is indicating that the Labware unit is not consistent
with the company's long-term growth strategy, which is focused on
advanced cell-based technology," said Michael Weinstein, an analyst
at J.P. Morgan Chase & Co.
For Becton Dickinson, the value of the deal is "pretty darn
good," said Peter Lawson, an analyst at Mizuho Securities USA. "It
allows them to be able to invest into higher growth, higher value
businesses within the cellular market."
The lab-products business "was a great cash cow for Becton
Dickinson," Lawson said, but he notes that it was a low-growth
business.
Corning, the world's largest maker of liquid-crystal-display
glass for TVs, has been struggling recently as lackluster
television demand has created a massive headwind for electronics
retailers, set manufacturers and suppliers like Corning. The
company in January reported its fourth-quarter profit slumped 53%
and said it plans to cut capacity in its LCD glass business, as
weak demand is leading to "significant" price declines.
Corning shares rose 9 cents to $13.57 in recent trading Tuesday
morning, while Becton Dickinson slid 65 cents to $76.04.
-By Anjali Athavaley and Mia Lamar, Dow Jones Newswires;
212-416-4912; anjali.athavaley@dowjones.com
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